Why Dayforce (DAY) Shares Are Sliding Today

Petr Huřťák /
2024/02/07 12:42 pm EST

What Happened:

Shares of online payroll and human resource software provider Dayforce (NYSE:DAY) fell 8.8% in the morning session after the company reported fourth-quarter earnings with billings falling below Wall Street's expectations, though revenue beat by a narrow margin. The total customer count also missed estimates. Looking ahead, full-year revenue guidance fell below expectations, implying 14% growth (vs 21.6% in FY2023). Overall, it was a weak quarter for the company.

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What is the market telling us:

Dayforce's shares are very volatile and over the last year have had 7 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 9 months ago, when the stock dropped 5.5% on the news that the company reported first-quarter results that beat analysts' revenue estimates. Customer growth also came in slightly better. However, gross margin, free cash flow, and earnings per share (EPS) were below Consensus. In addition, revenue guidance for the next quarter fell short of expectations, and the full year guidance was inline. Overall, it was a weaker quarter for the company.

Dayforce is down 0.5% since the beginning of the year, and at $65.54 per share it is trading 15.5% below its 52-week high of $77.55 from February 2023. Investors who bought $1,000 worth of Dayforce's shares 5 years ago would now be looking at an investment worth $1,512.

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