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Why Ceridian Stock Spiked Today

Shares of Ceridian HCM Holding Inc. (CDAY 10.38%), a human capital software company, were climbing today after the company’s second-quarter results beat analysts’ consensus top- and bottom-line estimates.

The tech stock had gained 10.4% as of 2:52 p.m. ET.

So what

The company reported Q2 revenue of $301.2 million, which was an increase of 20% year over year and ahead of Wall Street’s consensus average of about $294.5 million. Ceridian’s non-GAAP (generally accepted accounting principles) earnings of $0.21 per share — up from $0.12 in the year-ago quarter — were also far ahead of analysts’ consensus estimate of $0.11 per share.

A man smiling while looking at a computer.

Image source: Getty Images.

“In the second quarter, we continued to execute well against both our growth and profitability objectives, as driven by the growth of Dayforce recurring revenue and continued expansion of cloud recurring gross margin,” Ceridian’s Co-CEO David Ossip said in a press release.

Investors were clearly pleased with those results and likely also happy to see that the company’s platform, called Dayforce, increased its recurring revenue by 29% compared to the year-ago quarter, to $194.3 million.

Ceridian’s cloud revenue also made significant gains, with sales jumping 25.5% to $262.9 million.

Now what

The company’s strong performance in Q2 led to Ceridian’s management raising its guidance for the full year.

The company now expects 2022 revenue to be in the range of between $1.21 billion to $1.23 billion, up from management’s previous range of between $1.20 billion to $1.23 billion. Additionally, Ceridian’s 2022 earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance is now in the range of between $210 million to $225 million, up from the previous guidance of between $190 million to $205 million.

With strong quarterly results and the company raising its full-year guidance, it’s clear why investors are pushing up this tech stock today.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Image source: Getty Images.

Source: https://www.fool.com/investing/2022/08/04/why-ceridian-stock-spiked-today/

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