Shareholders in Dayforce (NYSE:DAY) are in the red if they invested three years ago

It is a pleasure to report that the Dayforce Inc. (NYSE:DAY) is up 38% in the last quarter. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 33% in the last three years, falling well short of the market return.

Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.

View our latest analysis for Dayforce

We don't think that Dayforce's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last three years, Dayforce saw its revenue grow by 19% per year, compound. That's a fairly respectable growth rate. Shareholders have endured a share price decline of 10% per year. This implies the market had higher expectations of Dayforce. However, that's in the past now, and it's the future is more important - and the future looks brighter (based on revenue, anyway).

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Dayforce is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Dayforce shareholders gained a total return of 12% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 5% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Dayforce .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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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.