Is Now An Opportune Moment To Examine Ceridian HCM Holding Inc. (NYSE:CDAY)?

Let's talk about the popular Ceridian HCM Holding Inc. (NYSE:CDAY). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Ceridian HCM Holding’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Ceridian HCM Holding

What's The Opportunity In Ceridian HCM Holding?

Great news for investors – Ceridian HCM Holding is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $88.41, but it is currently trading at US$68.29 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Ceridian HCM Holding’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Ceridian HCM Holding generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In Ceridian HCM Holding's case, its revenues over the next few years are expected to grow by 64%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since CDAY is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on CDAY for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CDAY. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example - Ceridian HCM Holding has 1 warning sign we think you should be aware of.

If you are no longer interested in Ceridian HCM Holding, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.