Dayforce Inc (DAY) Stock Forecast & Price Target

Dayforce has demonstrated strong financial performance, highlighted by a 16.4% year-over-year increase in total revenue and a remarkable 19.1% growth in recurring revenue ex-float, reflecting the company's robust demand for its cloud-based solutions. The company's ability to increase recurring revenue per customer to $163,101, along with add-on sales representing over 40% of total bookings, indicates effective cross-selling strategies and growing customer engagement. With guidance forecasting FY25 revenue ex-float growth between 11.9% and 12.8%, Dayforce appears well-positioned for sustained expansion in the human capital management sector.

The analysis indicates a negative outlook for Dayforce, primarily due to a guidance reduction in float revenue to $180 million, falling short of both prior expectations and the previous fiscal year by approximately $20 million. Additionally, the decline in full suite attach rates to 42% from 51% in the previous quarter suggests weakening sales momentum, compounded by a revenue miss in DRREFCC that came in lower than guidance. Furthermore, FY25 growth guidance of 16% at the midpoint, along with continued foreign exchange headwinds, raises concerns about the company's ability to sustain upper-teens growth, alongside a notable decrease in operating cash flow and free cash flow year-over-year.