CDAY

Ceridian HCM Holding Inc.

TMT


Presented:04/07/2022
Price:$62.80
Cap:$9.55B
Current Price:$63.96
Cap:$10.11B

Presented

Date04/07/2022
Price$62.80
Market Cap$9.55B
Ent Value$10.33B
P/E RatioN/A
Book Value$14.66
Div Yield0%
Shares O/S152.07M
Ave Daily Vol1,828,832
Short Int12.04%

Current

Price$63.96
Market Cap$10.11B
Ceridian HCM Holding, Inc. engages in the development of human capital management software. It offers Dayforce, Powerpay, and Bureau products and services. The Dayforce provides human resources (HR), payroll, benefits, workforce management, and talent management functionality. Powerpay is a cloud HR and payroll solution for the Canadian small business market, through both direct sales and established partner channels. The Bureau solutions offer payroll and payroll-related services using legacy technology. The company was founded on July 3, 2013, and is headquartered in Minneapolis, MN.

Publicly traded companies mentioned herein: Ceridian HCM Holding Inc (CDAY), Paycom Software Inc (PAYC), Workday Inc (WDAY)

Highlights

The presenter is short shares of Ceridian HCM Holding Inc (CDAY), believing the Street is too bullish on net adds for the core Dayforce platform (150 – 170 customers over the next year) due to increasing competition and the Bureau transition tailwind rolling off. Although the stock has fallen 13% in the last week to $61 per share, he still finds this a reasonable entry point and sees downside to $50 based on a ~17% EBIT margin in 2024 and a 40x earnings multiple. There is risk that the market rebounds and the stock reverts to trading on an EV/Sales basis, in which case CDAY moves higher, but he still thinks it will be a relative underperformer. 

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Idea Discussion

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