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Investing.com - KeyBanc Capital Markets maintained its Overweight rating and $65.00 price target on Dayforce (NYSE:DAY) Thursday, following the company’s second-quarter results. The target represents potential upside from the current price of $55.17, with InvestingPro data suggesting the stock is currently trading below its Fair Value.
The human capital management software provider reported slightly better-than-expected second-quarter performance while maintaining its 2025 Dayforce recurring revenue growth guidance of 15-17% on a constant currency basis, excluding float revenue. The company maintains impressive gross profit margins of ~51% and has achieved revenue growth of 13.46% over the last twelve months.
Dayforce raised its free cash flow outlook to 13.5-14% from the previous 12%, primarily driven by off-balance sheet backlog and activity tailwinds, according to KeyBanc’s research note. With a current free cash flow yield of 4% and an overall Financial Health score rated as ’FAIR’ by InvestingPro, which offers 8 additional key insights about the company’s performance.
The investment firm highlighted Dayforce’s continued strong bookings growth, which is sustaining at over 40%, along with work-in-progress commentary indicating the highest levels ever for the company.
KeyBanc expressed confidence in Dayforce’s second-half 2025 and 2026 recurring growth acceleration potential, citing the company’s near to long-term growth drivers and margin expansion opportunities.
In other recent news, Dayforce Inc reported strong financial results for the second quarter of 2025, with earnings per share reaching $0.61, which was 15.09% above the forecast of $0.53. The company’s revenue also surpassed expectations, coming in at $464.7 million compared to the anticipated $457.93 million. Despite these positive outcomes, analyst firms have adjusted their outlooks for Dayforce. TD Cowen lowered its price target to $67 from $69, maintaining a Buy rating due to concerns about near-term growth. Similarly, Jefferies reduced its price target to $60 from $65, keeping a Hold rating, though they noted Dayforce’s Core constant currency growth of 13.5% slightly exceeded the consensus estimate. The company also surpassed EBITDA expectations by 4%. These developments reflect a cautious outlook from analysts, despite Dayforce’s better-than-expected earnings performance.
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