Ceridian Drops on Outlook; Wall Street Lauds Overseas Expansion

Ceridian received mixed reviews from the analyst community regarding its quarter and guidance.
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Shares of Ceridian HCM  (CDAY) - Get Report were down Wednesday after the provider of human-resources software topped analysts' fourth-quarter expectations but reported weaker-than-estimated first-quarter guidance. 

The Minneapolis company said the coronavirus pandemic's effect on the labor market hurt its business.

Ceridian reported adjusted earnings of 9 cents a share against the consensus estimate of 7 cents in a FactSet survey of analysts. Revenue of $222.8 million beat the forecast of $217.5 million. 

At last check Ceridian shares were trading off 10% at $93.90.

Here is what Wall Street is saying about the quarter. 

Mizuho Securities affirmed a buy rating and $110 price target, saying that the fourth-quarter results reflect the employment crisis caused by the coronavirus pandemic. "We remain enthused on new business bookings, strong Dayforce demand, international expansion and the Dayforce Wallet opportunity," Mizuho's note said, according to Bloomberg. 

Piper Sandler kept a neutral rating while lowering its price target to $104 a share from $106. Ceridian "remained resilient despite a tough macro," through its Digital Wallet program and international expansion," the investment firm said.

Needham maintained a buy rating while increasing its price target to $120 from $105. While investors are focusing "on the slippage of several large deals into January, our industry work suggests this was likely just timing related," as opposed to a change in the company's fundamentals, the firm said.

BMO Capital affirmed a market-perform rating while raising its price target to $112 from $95. "Ceridian reported a solid quarter, but the guide was worse than expected. ... [We] continue to like several longer-term catalysts," BMO said. Near-term upside for the stock is limited due to the employment situation, the firm said.