Dayforce

Methodology

Dayforce's cloud-based HCM platform generates predictable subscription earnings with strong revenue visibility from multi-year contracts. The recurring revenue model and expanding margins as the business scales make earnings-based valuations increasingly reliable. Fair value works well when accounting for mid-teens earnings growth from new customer additions and upselling existing clients.

Methodology

Dayforce typically trades at PEG ratios between 1.5-2.5x, reflecting premium valuations for its differentiated HCM platform and competitive positioning against Workday and ADP. The company's single-platform architecture and international expansion support sustained growth. PEG works effectively given consistent execution and clear visibility into long-term growth trajectories.

Methodology

Dayforce doesn't pay dividends and reinvests cash flow into R&D, sales expansion, and strategic initiatives to capture share in large HCM markets. Management prioritizes compounding earnings growth over capital returns. Total return depends entirely on continued market share gains and successful execution of the international expansion strategy.