Dayforce (NYSE:DAY) and AvidXchange (NASDAQ:AVDX) Critical Analysis

Dayforce (NYSE:DAY) and AvidXchange (NASDAQ:AVDX) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Profitability

This table compares Dayforce and AvidXchange’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dayforce	2.89%	6.35%	1.61%
AvidXchange	-3.18%	-0.23%	-0.07%

Risk and Volatility

Dayforce has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, AvidXchange has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Valuation and Earnings

This table compares Dayforce and AvidXchange”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dayforce	$1.63 billion	6.28	$54.80 million	$0.33	196.76
AvidXchange	$413.47 million	4.04	-$47.33 million	($0.15)	-53.87

Dayforce has higher revenue and earnings than AvidXchange. AvidXchange is trading at a lower price-to-earnings ratio than Dayforce, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Dayforce and AvidXchange, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dayforce	0	5	7	1	2.69
AvidXchange	2	7	5	0	2.21

Dayforce currently has a consensus target price of $69.75, indicating a potential upside of 7.82%. AvidXchange has a consensus target price of $10.57, indicating a potential upside of 31.32%. Given AvidXchange’s higher possible upside, analysts clearly believe AvidXchange is more favorable than Dayforce.

Institutional & Insider Ownership

80.6% of AvidXchange shares are owned by institutional investors. 4.9% of Dayforce shares are owned by insiders. Comparatively, 10.3% of AvidXchange shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Dayforce beats AvidXchange on 12 of the 15 factors compared between the two stocks.

About Dayforce

Dayforce Inc., together with its subsidiaries, operates as a human capital management (HCM) software company in the United States, Canada, and internationally. It offers Dayforce, a cloud HCM platform that provides human resources, payroll and tax, workforce management, wallet, benefits, and talent intelligence functionalities; and Powerpay, a cloud HR and payroll solution for the small business market. The company also provides payroll and payroll-related services; and implementation and professional services. It sells its solutions through direct sales force and third-party channels. The company was formerly known as Ceridian HCM Holding Inc. and changed its name to Dayforce Inc. in February 2024. Dayforce Inc. was founded in 1992 and is headquartered in Minneapolis, Minnesota.

About AvidXchange

AvidXchange Holdings, Inc. provides accounts payable (AP) automation software and payment solutions for middle market businesses and their suppliers in North America. The company offers AP automation software, a SaaS-based solution that automates and digitizes capture, review, approval, and payment of invoices for buyers; the AvidPay network that connects two-sided payments with buyers and suppliers; and the AvidXchange Supplier Hub, which provides supplier insights to cash flow, tools for in-network invoices and payments, and early payment feature. Its platform offers electronic invoice capture, workflow routing, and automated payments solutions. The company serves real estate, community association management, construction, financial services, healthcare facilities, social services, education, hospitality, and media sectors through direct salesforces; strategic channel partnerships; and software and technology business partners. AvidXchange Holdings, Inc. was incorporated in 2000 and is headquartered in Charlotte, North Carolina.