Please ensure Javascript is enabled for purposes of website accessibility

Why Ceridian HCM Stock Jumped Friday

By Daniel Sparks – Nov 8, 2019 at 5:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A beat-and-raise quarter from the software company has investors looking up.

What happened

Shares of Ceridian HCM (CDAY -0.14%) jumped on Friday, rising 10.2% by the time the market closed.

The stock's gain follows the third-quarter update of the company, which specializes in human-capital-management software, and featured better-than-expected top- and bottom-line results.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

Revenue in the tech company's third quarter rose 13.6% year over year, to $202.3 million, beating analysts' average forecast for revenue of $196.5 million. The company's earnings per share was $0.11, up from $0.10 in the year-ago quarter and beating a consensus estimate for $0.10.

"During the third quarter, we continued to see strong market demand for our solutions," said Ceridian CEO David Ossip in the company's earnings release. He also noted that its Dayforce recurring revenue was up 32.6% year over year, coming in at $109.4 million. Further, when including "revenue from Dayforce professional services and other, total Dayforce revenue grew 30.2%, to $143.7 million, which was above 30% growth for the first time since the third quarter of 2018," the CEO added.

Now what

Notably, Ossip said Ceridian expects an acceleration in Dayforce revenue in Q4, driven by Dayforce recurring revenue.

The company lifted its outlook for the full year, guiding for 2019 revenue between $822 million and $825 million. This is up from a previous forecast for revenue between $810 million and $815 million.

Daniel Sparks 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.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.