Evaluating Dayforce (DAY) Valuation Following Recent Share Price Momentum

Dayforce (DAY) stock has caught some attention recently as investors look at the company’s momentum over the past few months. Shares have seen a steady climb, prompting a closer look at what is driving sentiment around the business.

See our latest analysis for Dayforce.

Dayforce’s share price has rebounded sharply in the past three months, with a 36.9% gain building positive momentum. However, its total shareholder return over the past year remains negative. Investors seem focused on the company’s revenue and earnings growth, but longer-term returns have lagged as the market weighs ongoing challenges alongside recent progress.

If you’re curious about other companies showing strong momentum and insider confidence, it might be the perfect moment to discover fast growing stocks with high insider ownership

With recent gains pushing the stock closer to analyst targets, the big question is whether Dayforce is undervalued at current levels or if the market has already priced in its anticipated growth trajectory.

Most Popular Narrative: 2.6% Undervalued

Compared to its last close price of $68.35, the most widely followed narrative puts Dayforce’s fair value at $70.17, slightly above the current market level. With just a narrow gap between the two, the debate centers on whether optimistic growth projections justify the premium implied by this narrative.

Deepening module penetration and rapid adoption of value-added products (notably AI-powered offerings, analytics, talent, and Managed services) among existing customers, combined with an average per-employee-per-month (PEPM) still significantly below potential, indicates large untapped upsell opportunities. This supports the case for higher average contract values and expanding recurring revenue per user over time.

Read the complete narrative.

What’s the secret behind this narrow undervaluation call? It all comes down to bold assumptions about future revenue growth and margin expansion, potentially a game-changing mix. Want to see what data points are driving this narrative’s price target? Dig deeper to see what’s fueling analyst confidence.

Result: Fair Value of $70.17 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Dayforce still faces potential hurdles if large incumbents counter its advances or if high client concentration makes it vulnerable to sector downturns.

Find out about the key risks to this Dayforce narrative.

Another View: The Sales Ratio Comparison

While some see Dayforce as slightly undervalued, its price-to-sales ratio tells a different story. At 5.8x, the company trades much higher than the Professional Services industry average of 1.4x and above its own fair ratio of 3.1x. This gap could signal valuation risk if growth falls short. Could the stock be priced for perfection?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Dayforce Narrative

If you want to see the numbers for yourself or draw your own conclusions, you can build your own narrative in just a few minutes, and Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Dayforce.

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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.

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