Ceridian Earns Price Target Bumps From Analyst Post Q2 Performance, Shares Pop

Ceridian HCM Holding Inc CDAY clocked 20.3% revenue growth in Q2 to $301.2 million, missing the consensus of $379 million. Dayforce recurring revenue was $194.3 million, up 29.0% Y/Y.

Barclays analyst Raimo Lenschow had an Underweight rating and a $52 price target. He noted that the significant wins in the current quarter and delayed revenue impact should create an exciting story.

So far, CDAY, like other HR players, did not see a macro headwind, he observed. Lenschow saw the tight labor market and fight for talent driving more investments into the space.

Lenschow acknowledged the impressive Cloud and Bureau revenue growth and profitability. He also highlighted the continued Dayforce Wallet momentum.

BMO analyst Daniel Jester had an Outperform rating and a $73 price target, up from $70. According to him, CDAY results cleared a lower bar. 

Revenue upside in 2Q was of mixed quality but welcomed significant gross margin and EBITDA outperformance. The mid-term outlook potentially brightened with several large enterprise deals building his conviction.

Credit Suisse analyst Kevin McVeigh had an Outperform rating and a $75 price target, up from $70. He said CDAY built on recent momentum following impressive Q2 revenue and EBITDA beat driven by ongoing strong customer demand and revenue per customer despite the restructuring hassles.

McVeigh saw the stock offering investors an underappreciated payments opportunity and upmarket strength given its differentiated product offering and unique international M&A playbook. 

Given the current macro uncertainty, he believes Dayforce wallet is significantly differentiated. The stock remained a top pick and Credit Suisse U.S.'s top pick given the current below-average EV/sales and potential upside amid increasing wallet adoption. 

Mizuho analyst Siti Panigrahi had a Buy rating and an $80 price target. He noted that Dayforce continues to gain share, and the increased investments in core areas should further drive sustainable growth for Ceridian.

Panigrahi viewed CDAY as an undervalued story in the cloud payroll category. Despite 25% growth in Cloud Revenue, similar to its peers, it traded well below its payroll players.

Price Action: CDAY shares traded higher by 9.73% at $64.50 on the last check Thursday.