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Investing.com - UBS reiterated its Buy rating and $72.00 price target on Dayforce (NYSE:DAY) amid reports of a potential acquisition by private equity firm Thoma Bravo. The stock has shown impressive momentum, gaining nearly 30% in the past week.
The potential deal was reported by Bloomberg, which indicated that Thoma Bravo is in advanced discussions to acquire Dayforce, with an announcement possibly coming in the next few weeks.
Dayforce stock rose approximately 25% in premarket trading to around $66 following the news, suggesting a potential enterprise value of approximately $11.2 billion for the deal, or about 4.3 times UBS’s estimated 2027 sales.
The acquisition aligns with Thoma Bravo’s historical software-as-a-service strategy of leveraging scale, recurring revenue, and high-margin profiles to drive operational efficiencies and pursue tuck-in acquisitions.
UBS noted that the potential transaction supports its positive view of Dayforce’s strong market positioning, with recurring ex-float revenue growing approximately 15-17% year-over-year and expected adjusted EBITDA margins of around 32% for 2025.
In other recent news, Dayforce Inc reported a strong second quarter for 2025, with earnings per share of $0.61, exceeding the forecasted $0.53 by 15.09%. The company’s revenue also surpassed expectations, reaching $464.7 million compared to the anticipated $457.93 million. Despite these positive earnings, there are reports suggesting that private equity firm Thoma Bravo is considering acquiring Dayforce, although BMO Capital has no insights on the potential transaction. BMO Capital reiterated its Outperform rating with a price target of $67.00 amid these acquisition rumors.
Meanwhile, KeyBanc Capital Markets maintained its Overweight rating and a $65.00 price target, citing strong bookings and the company’s maintained 2025 Dayforce recurring revenue growth guidance. On the other hand, TD Cowen lowered its price target to $67.00 from $69.00, pointing to near-term growth concerns. Similarly, Jefferies reduced its price target to $60.00 from $65.00, maintaining a Hold rating due to a cautious outlook. Despite these adjustments, Dayforce’s Core constant currency growth of 13.5% slightly exceeded the consensus estimate of 13.3%, and the company surpassed EBITDA expectations by 4%.
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