CDAY Stock Overview
Ceridian HCM Holding Inc., together with its subsidiaries, operates as a human capital management (HCM) software company in the United States, Canada, and internationally.
Ceridian HCM Holding Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$47.60|
|52 Week High||US$130.37|
|52 Week Low||US$43.23|
|1 Month Change||-11.51%|
|3 Month Change||-31.03%|
|1 Year Change||-51.37%|
|3 Year Change||-8.21%|
|5 Year Change||n/a|
|Change since IPO||52.52%|
Recent News & Updates
Ceridian: Slightly More Positive Story, But Not Yet A Buy
Ceridian shares have fallen 55% year to date, collapsing the valuation of what was previously a very overvalued enterprise software stock. Ceridian's HCM platform has seen improved growth thanks to normalizing employment levels. Float revenue should also benefit from higher interest rates. At the same time, Ceridian's Dayforce platform lags in comparison to bigger brands like Workday. Still trading at ~6x forward revenue, Ceridian is not yet a screaming buy. The markets still can't seem to decide on a direction: year-end rally or recession slump. In spite of continued volatility, I continue to encourage investors to prepare for a rebound by investing into undervalued, beaten-down growth software stocks. On paper, Ceridian (CDAY) looks like an appealing play. This HCM software stock has lost 55% of its value year to date: but that correction is largely a reflection of the fact that the stock was massively overvalued to begin with. Though the combination of Ceridian's slightly improved fundamental results and valuation slide have made the stock slightly less unappealing, it's still far from my ideal rebound play. In early May, Ceridian released relatively strong Q1 results, which we'll discuss in more detail in the next section. The company is benefiting/continues to expect benefit from two primary factors: one, a recovery in employment levels which helps its products that are seat-based; and two, rising interest rates which helps Ceridian's interest income on float balances it holds on behalf of its clients. Since that earnings release, however, Ceridian has still fallen ~15% in sympathy with other software names. I remain neutral on Ceridian, and I don't think this is a "buy the dip situation." Some of my existing concerns on Ceridian remain very relevant: Weak profile vis-a-vis cloud competitors. HCM is a very crowded space, dominated by the likes of Workday and Oracle (ORCL), and Dayforce is barely a distant laggard. Margin lags cloud peers. While Ceridian's cloud revenue carries a low-70s gross margin like peers, the weighting of Ceridian's revenue toward float and other lower-margin services puts Ceridian's overall GAAP gross margin at just 54% in its most recent quarter, below most SaaS peers and justifying a significant discount in its valuation multiple. Confusing leadership structure, with Ceridian just having elevated its COO to co-CEO status, while still reporting to the original CEO (seems like a catalyst for boosted compensation to me). Recent examples like Salesforce (CRM) indicate a dual-CEO structure doesn't often last or work out well. To me, Ceridian's valuation remains prohibitively expensive to merit an investment. At current share prices near $47, Ceridian trades at a market cap of $7.23 billion. After we net off the $354.8 million of cash and $1.22 billion of debt on the company's most recent balance sheet, the company's resulting enterprise value is $8.10 billion. Meanwhile, for the current fiscal year, the company has guided to $1.208-$1.230 billion of revenue, or 18-20% y/y growth; and $190-$205 million of Adjusted EBITDA, or a 16-17% adjusted EBITDA margin. Ceridian guidance (Ceridian Q1 shareholder letter) Against the midpoint of this outlook, Ceridian trades at: 6.6x EV/FY22 revenue 41.1x EV/FY22 Adjusted EBITDA In other words, for a company of what I consider to be questionable fundamental quality, Ceridian is quite overvalued. I'd wait for Ceridian to trade at a mid-teens Adjusted EBITDA multiple (either through continued share price compression or adjusted EBITDA expansion) until I can seriously consider a bullish position in this name. The bottom line here: Ceridian continues to lack a "wow" factor, either in its results or in its price. There are far better software stocks to invest in to position yourself for a rebound (top picks at the moment include Sumo Logic (SUMO), Asana (ASAN), Coupa (COUP), and Palantir (PLTR)). Q1 download Let's now go through Ceridian's latest Q1 results in greater detail. The Q1 earnings summary is shown below: Ceridian Q1 results (Ceridian Q1 shareholder letter) Ceridian's revenue in Q1 grew 25% y/y to $293.3 million, beating Wall Street's expectations of $289.4 million (+23% y/y) by a two-point margin. This growth rate comes well ahead of the company's full-year growth expectations of 18-20% y/y, though it did decelerate two points versus 27% y/y growth in Q4. Several macro factors are responsible for helping Ceridian's results in the quarter. First, relative to early 2021, more of Ceridian's clients are staffed at fuller levels (especially given late-2021 hiring sprees to accommodate a post-COVID economic resurgence), which helps a company whose products are primarily priced on a per-seat basis. Second, greater float balances (up 18% y/y) helped to offset a slight 11bps decline in float yields. Moving into Q2, however, with rising interest rates, Ceridian is expecting float revenue growth to accelerate to 25% y/y, versus just 9% y/y growth in Q1.
|CDAY||US Software||US Market|
Return vs Industry: CDAY underperformed the US Software industry which returned -23.6% over the past year.
Return vs Market: CDAY underperformed the US Market which returned -21.7% over the past year.
|CDAY Average Weekly Movement||8.7%|
|Software Industry Average Movement||11.0%|
|Market Average Movement||8.1%|
|10% most volatile stocks in US Market||16.9%|
|10% least volatile stocks in US Market||3.2%|
Stable Share Price: CDAY is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.
Volatility Over Time: CDAY's weekly volatility (9%) has been stable over the past year.
About the Company
Ceridian HCM Holding Inc., together with its subsidiaries, operates as a human capital management (HCM) software company in the United States, Canada, and internationally. It offers Dayforce, a cloud HCM platform that provides human resources (HR), payroll, benefits, workforce management, and talent management functionality; and Powerpay, a cloud HR and payroll solution for the small business market. The company also provides Bureau solutions for payroll and payroll-related services.
Ceridian HCM Holding Fundamentals Summary
|CDAY fundamental statistics|
Is CDAY overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|CDAY income statement (TTM)|
|Cost of Revenue||US$621.50m|
Last Reported Earnings
Mar 31, 2022
Next Earnings Date
|Earnings per share (EPS)||-0.55|
|Net Profit Margin||-7.72%|
How did CDAY perform over the long term?See historical performance and comparison
Is CDAY undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 1/6
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for CDAY?
Other financial metrics that can be useful for relative valuation.
|What is CDAY's n/a Ratio?|
Price to Sales Ratio vs Peers
How does CDAY's PS Ratio compare to its peers?
|CDAY PS Ratio vs Peers|
|Company||PS||Estimated Growth||Market Cap|
MANH Manhattan Associates
BKI Black Knight
XM Qualtrics International
CDAY Ceridian HCM Holding
Price-To-Sales vs Peers: CDAY is good value based on its Price-To-Sales Ratio (6.7x) compared to the peer average (6.8x).
Price to Earnings Ratio vs Industry
How does CDAY's PE Ratio compare vs other companies in the US Software Industry?
Price-To-Sales vs Industry: CDAY is expensive based on its Price-To-Sales Ratio (6.7x) compared to the US Software industry average (4.4x)
Price to Sales Ratio vs Fair Ratio
What is CDAY's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PS Ratio||6.7x|
|Fair PS Ratio||4.6x|
Price-To-Sales vs Fair Ratio: CDAY is expensive based on its Price-To-Sales Ratio (6.7x) compared to the estimated Fair Price-To-Sales Ratio (4.6x).
Share Price vs Fair Value
What is the Fair Price of CDAY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: CDAY ($47.6) is trading above our estimate of fair value ($13.84)
Significantly Below Fair Value: CDAY is trading above our estimate of fair value.
Price to Earnings Growth Ratio
PEG Ratio: Insufficient data to calculate CDAY's PEG Ratio to determine if it is good value.
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How is Ceridian HCM Holding forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?
Future Growth Score4/6
Future Growth Score 4/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: CDAY is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).
Earnings vs Market: CDAY is forecast to become profitable over the next 3 years, which is considered above average market growth.
High Growth Earnings: CDAY is expected to become profitable in the next 3 years.
Revenue vs Market: CDAY's revenue (15.1% per year) is forecast to grow faster than the US market (8.2% per year).
High Growth Revenue: CDAY's revenue (15.1% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: CDAY's Return on Equity is forecast to be low in 3 years time (2.1%).
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How has Ceridian HCM Holding performed over the past 5 years?
Past Performance Score0/6
Past Performance Score 0/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: CDAY is currently unprofitable.
Growing Profit Margin: CDAY is currently unprofitable.
Past Earnings Growth Analysis
Earnings Trend: CDAY is unprofitable, and losses have increased over the past 5 years at a rate of 11.2% per year.
Accelerating Growth: Unable to compare CDAY's earnings growth over the past year to its 5-year average as it is currently unprofitable
Earnings vs Industry: CDAY is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (26.8%).
Return on Equity
High ROE: CDAY has a negative Return on Equity (-3.91%), as it is currently unprofitable.
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How is Ceridian HCM Holding's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Stable Cash Runway
Forecast Cash Runway
Financial Position Analysis
Short Term Liabilities: CDAY's short term assets ($8.0B) exceed its short term liabilities ($7.6B).
Long Term Liabilities: CDAY's short term assets ($8.0B) exceed its long term liabilities ($1.3B).
Debt to Equity History and Analysis
Debt Level: CDAY's net debt to equity ratio (40.2%) is considered high.
Reducing Debt: CDAY's debt to equity ratio has reduced from 109.4% to 56.7% over the past 5 years.
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: CDAY has sufficient cash runway for more than 3 years based on its current free cash flow.
Forecast Cash Runway: Insufficient data to determine if CDAY has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.
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What is Ceridian HCM Holding current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Future Dividend Coverage
Dividend Yield vs Market
Notable Dividend: Unable to evaluate CDAY's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate CDAY's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if CDAY's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if CDAY's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as CDAY has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
David Ossip (55 yo)
Mr. David D. Ossip serves as an Independent Director at Dragoneer Growth Opportunities Corp. II. He has been an Independent Director of Dragoneer Growth Opportunities Corp. III since March 22, 2021. He ser...
CEO Compensation Analysis
Compensation vs Market: David's total compensation ($USD10.63M) is about average for companies of similar size in the US market ($USD8.30M).
Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.
Experienced Management: CDAY's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.
Experienced Board: CDAY's board of directors are considered experienced (4 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: CDAY insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.3%.
Ceridian HCM Holding Inc.'s employee growth, exchange listings and data sources
- Name: Ceridian HCM Holding Inc.
- Ticker: CDAY
- Exchange: NYSE
- Founded: 2013
- Industry: Application Software
- Sector: Software
- Implied Market Cap: US$7.266b
- Shares outstanding: 152.64m
- Website: https://www.ceridian.com
Number of Employees
- Ceridian HCM Holding Inc.
- 3311 East Old Shakopee Road
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/07/01 00:00|
|End of Day Share Price||2022/07/01 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.