DAY: Merger Vote And Evolving Profit Outlook Will Shape Future Returns

Analysts have modestly reduced their price target on Dayforce by approximately 3 percent to around 70 dollars. They cite a higher discount rate and lower future valuation multiples, partially offset by slightly stronger revenue growth and notably improved profit margin expectations.

What's in the News

• Dayforce has issued proxy materials for a November 12, 2025 special meeting where shareholders will vote on the proposed merger with Thoma Bravo, with the board of directors and proxy advisors ISS and Glass Lewis recommending a vote in favor of the deal (proxy materials, merger process).
• Regulatory review of the proposed merger progressed as the Hart Scott Rodino waiting period expired and Competition Act conditions were met, leaving only remaining regulatory clearances, shareholder approval, and other customary closing conditions outstanding (merger regulatory update).
• T. Rowe Price Group publicly opposed the proposed Thoma Bravo acquisition in an exempt solicitation and open letter to Dayforce’s board. The firm argued the company is on track to deliver 1 billion dollars in annual free cash flow, stated that the offer undervalues its long term prospects, and indicated it will vote against the deal (shareholder activism).
• Dayforce introduced a suite of new AI driven offerings, including Dayforce AI Agents, Dayforce AI Workspace, and Dayforce Strategic Workforce Planning, aimed at embedding intelligence into workflows, enabling collaborative AI workspaces, and accelerating data driven workforce planning (product announcements at Dayforce Discover).
• The company expanded its strategic ecosystem, deepening its collaboration with Microsoft around Dayforce AI Agents and enhancing the Dayforce Partner Network with new service, community, and technology alliances to broaden reach and speed customer time to value (partnership and ecosystem updates).

Valuation Changes

• Fair Value Estimate reduced modestly from approximately 72 dollars to 70 dollars, reflecting about a 3 percent downward adjustment to the target valuation.
• Discount Rate increased slightly from roughly 7.19 percent to 7.35 percent, modestly raising the hurdle rate applied in the valuation model.
• Revenue Growth nudged higher from about 12.88 percent to 12.98 percent, indicating a small improvement in long term topline expectations.
• Net Profit Margin risen meaningfully from roughly 16.94 percent to 21.55 percent, signaling a materially stronger medium term profitability outlook.
• Future P/E fallen significantly from about 32.0x to 24.0x, implying a lower multiple applied to projected earnings despite improved margin expectations.