Third Quarter Earnings Highlights: Dayforce (NYSE:DAY) vs. the Rest of the HR Software Stocks
As third-quarter earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the HR software industry, including Dayforce (NYSE:DAY) and its peers.
Modern HR software has two powerful benefits: cost savings and ease of use. To save costs, businesses of all sizes much prefer the flexibility of cloud-based software delivered through a web browser and paid for on a subscription basis, rather than the hassle and complexity of purchasing and managing business software on-premises. In terms of usability, the consumerization of enterprise software creates seamless experiences that merge multiple standalone processes, such as payroll and compliance, into a single, easy-to-use platform.
The six HR software stocks we track reported a mixed third quarter. As a group, revenues were in line with analyst consensus estimates, while revenues for the next quarter were 1.7% below.
Fortunately, the companies’ share prices have been resilient, having risen an average of 7% since the last earnings results.
Dayforce (NYSE:DAY), founded in 1992 as Ceridian, an outsourced payroll processor and transformed following the acquisition of Dayforce in 2012, is a provider of cloud-based payroll and HR software aimed at mid-market companies.
Dayforce reported revenue of $440 million, up 16.6% year over year. This print exceeded analyst expectations by 2.7%. Despite the revenue growth, it was still a mixed quarter for the company, with an impressive profit compared to analysts’ EBITDA estimates.
“Our dedicated team delivered excellent results in the third quarter, allowing us to close out 2024 on a strong note,” said David Ossip, Chairman and CEO of Dayforce.
Total turnover of Dayforce
Interestingly, the stock is up 12.9% since reporting and is currently trading at $73.75.
Read our full report on Dayforce here. It’s free.
Founded in 1990 in Cincinnati, Ohio, Paycor (NASDAQ: PYCR) provides software for small businesses to manage their payroll and HR needs in one place.
Paycor reported revenue of $167.5 million, up 16.6% year over year, and beat analyst expectations by 3.3%. The company had a strong quarter with an impressive increase in analyst EBITDA estimates and an impressive increase in analyst expectations.
Paycor’s total revenue
Paycor achieved the highest revenue growth according to analysts and the fastest revenue growth among its peers. Although it has had a good quarter compared to its peers, the market seems dissatisfied with the results as the stock is down 1.5% since reporting. It is currently trading at $16.42.
Is Now the Time to Buy Paycor? See our full analysis of earnings results here. It’s free.
Asure (NASDAQ:ASUR), formed from the merger of two small workforce management companies in 2007, offers cloud-based payroll and HR software for small and medium-sized businesses (SMBs).
Asure reported revenue of $29.3 million, flat year-over-year, falling 6.5% short of analyst expectations. It was a disappointing quarter as next quarter’s revenue expectations significantly missed analysts’ expectations and analysts’ EBITDA estimates were significantly missed.
Asure delivered the weakest performance against analyst estimates, the slowest revenue growth and the weakest full-year forecast update in the group. As expected, the stock has fallen 13.6% since the results and is currently trading at $8.58.
Read our full analysis of Asure’s results here.
Paychex (NASDAQ:PAYX), one of the oldest service providers in the industry, offers payroll and HR software solutions to its customers.
Paychex reported revenue of $1.32 billion, up 2.5% year over year. This result met analysts’ expectations. Overall, it was a satisfying quarter as it also delivered a decent improvement on analysts’ EBITDA estimates.
The stock is up 5.6% since reporting and is currently trading at $141.67.
Read our full, actionable report on Paychex here. It’s free.
Founded in 1998 as one of the first online payroll companies, Paycom (NYSE:PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.
Paycom reported revenue of $451.9 million, up 11.2% year over year. This figure exceeded analyst expectations by 1.1%. It was a strong quarter as analyst EBITDA estimates and full-year EBITDA expectations impressively exceeded analyst expectations.
The stock is up 28.8% since reporting and is currently trading at $221.99.
Read our full, actionable report on Paycom here. It’s free.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually declining from its post-pandemic peak and moving closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashy recession signals. This is the much-desired soft landing that many investors were hoping for. The recent interest rate cuts (0.5% in September and 0.25% in November 2024) have boosted the stock market, making 2024 a strong year for equities. Donald Trump’s presidential victory in November fueled additional market gains, sending indexes to record highs in the days following his victory. However, debates over possible corporate tax rates and adjustments continue, raising questions about economic stability in 2025.
Do you want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem stocks and add them to your watchlist. These companies are primed for growth regardless of the political or macroeconomic environment.
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