Dayforce Inc (DAY)
Valuation Overview•Is Dayforce Inc Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Moderate quality score of 49/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street sentiment is generally neutral alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
DAY struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company is driving exceptional top-line expansion (19.8% 3Y CAGR) paired with stable bottom-line earnings. Operating efficiency remains adequate with margins around 7.0%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $481.6M | +16.3% | +19.8% | +16.4% | — | |
| EBITDA | $74.8M | — | +95.5% | — | — | |
| Net Income | -$196.8M | -67.0% | — | — | — | |
| EPS (Diluted) | $-1.23 | -68.6% | — | -27.0% | — | |
| Free Cash Flow | $5.0M | +63.2% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 52.9% | 42.3% | 40.9% | 40.5% |
| Operating Margin | 7.0% | 4.2% | 2.0% | 3.7% |
| Net Margin | -7.9% | -0.4% | -1.8% | -3.9% |
| FCF Margin | 8.8% | 6.6% | 1.5% | -3.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q1'26Latest | $0.70 | $0.37 | -47.1% | ||
| Q4'25 | $0.56 | $0.37 | -33.9% | ||
| Q3'25 | $0.52 | $0.61 | +17.3% | ||
| Q2'25 | $0.55 | $0.58 | +5.8% | ||
| Q1'25 | $0.46 | $0.60 | +30.4% | ||
| Q4'24 | $0.43 | $0.47 | +9.4% | ||
| Q3'24 | $0.37 | $0.48 | +29.7% | ||
| Q2'24 | $0.45 | $0.43 | -4.4% |
Total return is +24.2% (1Y), lagging the benchmark by -0.8%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +0.9% | -8.5% | — |
| 1Y | +24.2% | -0.8% | — |
| 3YCAGR | +1.2% | -18.3% | — |
| 5YCAGR | -5.2% | -17.2% | — |
| 10YCAGR | +8.4% | -5.3% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Dayforce Inc (DAY) valuation, health, and returns.
Dayforce Inc is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -72.0% downside from DCF intrinsic value of $19.56)
Dayforce Inc has multiple valuation anchors: DCF Intrinsic Value: $19.56 | Peer Relative Fair Value: $24.75 | Wall Street Analyst Target: $67.71 (implying -3.1% upside). A convergence of these signals offers higher conviction.
Dayforce Inc displays fair financial health with a composite quality score of 49/100, supported by a Altman Z-Score of 1.1 (distress zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 2.5%.
Dayforce Inc does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
Dayforce Inc's current growth trajectory is Decelerating. The company achieved +16.3% 1Y revenue growth and -68.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +19.8%.
Wall Street consensus is Hold based on 22 analysts, beating EPS expectations in 50% of recent quarters with a -2-quarter streak. The consensus price target represents a -3.1% change from current levels.
Investment risks for Dayforce Inc include: -16.8% 1-year max drawdown, elevated distress risk. Volatility risk is characterized by a beta of 0.35x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.