03:44 PM EDT, 08/15/2024 (MT Newswires) -- Dayforce ( DAY ) has a favorable cloud revenue mix and improved cash flow, with recent stock underperformance reflecting market concerns already priced in, UBS said in a note Thursday.

Dayforce's ( DAY ) strategic initiatives, including its focus on transformation to cloud, product offerings and a disciplined approach to capital allocation are expected to drive long-term value creation, the investment firm said.

The company's Wallet and Flex offerings have a competitive edge over its peers due to superior technology, the analysts noted.

Risks to Dayforce's ( DAY ) growth include macroeconomic conditions, competition in software-as-a-service and possibility of a slowdown in employment affecting its employee-based pricing model, UBS said.

Dayforce's ( DAY ) exposure to float income, which comprises roughly 11% of its fiscal 2023 revenues, was noted as a significant risk, with EPS highly sensitive to changes in float income compared to its peers.

UBS maintained the buy rating and a price target of $90 for Dayforce ( DAY ).

Price: 55.69, Change: +1.63, Percent Change: +3.01