Stifel cuts Dayforce to Hold on Thoma Bravo’s $70 bid

Investing.com -- Stifel downgraded Dayforce to Hold from Buy, saying the stock offers little upside after the human capital management software provider agreed to a $70 per share all-cash buyout from Thoma Bravo.

The brokerage lowered its price target to $70, matching the offer.

According to Dayforce’s proxy filing, negotiations with the private equity firm stretched over several rounds.

Thoma Bravo initially proposed $65–68 a share and later attempted to reduce its offer to $67.50 after a Bloomberg report, but the board held firm at $70.

Stifel said the filing shows $70 represents the “highest and best price that Thoma Bravo was willing to pay,” and that pressing for more risked losing the deal or prompting a price cut.

The brokerage said Dayforce has a large market opportunity and strong revenue visibility, but with shares already trading near the offer, upside is capped.

It applied a 4.4x revenue multiple and about 23x its 2027 free cash flow estimate to arrive at the $70 target.

Dayforce, founded in 1992 and headquartered in Minneapolis, provides HR, benefits, talent management, workforce management and payroll software.

Its main product is the Dayforce platform, with additional services offered through PowerPay in Canada and older Bureau offerings.

Stifel said risks to the company include a highly competitive market, macroeconomic uncertainty, potential data breaches, and the challenge of sustaining international sales momentum.

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