Financial Analysis: Ceridian HCM (NYSE:CDAY) & Shopify (NYSE:SHOP)

Ceridian HCM (NYSE:CDAY) and Shopify (NYSE:SHOP) are both large-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Risk and Volatility

Ceridian HCM has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, Shopify has a beta of 2.46, meaning that its share price is 146% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Ceridian HCM and Shopify, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ceridian HCM	0	0	2	0	3.00
Shopify	1	15	23	1	2.60

Ceridian HCM presently has a consensus price target of $80.50, suggesting a potential upside of 8.56%. Shopify has a consensus price target of $99.03, suggesting a potential downside of 8.46%. Given Ceridian HCM’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ceridian HCM is more favorable than Shopify.

Valuation & Earnings

This table compares Ceridian HCM and Shopify”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ceridian HCM	$1.45 billion	7.98	-$73.40 million	$0.03	2,471.67
Shopify	$8.21 billion	17.02	$132.00 million	$1.07	101.10

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

Insider and Institutional Ownership

69.3% of Shopify shares are held by institutional investors. 4.5% of Ceridian HCM shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Ceridian HCM and Shopify’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ceridian HCM	0.28%	2.03%	0.51%
Shopify	16.84%	11.60%	9.37%

Summary

Shopify beats Ceridian HCM on 11 of the 15 factors compared between the two stocks.

About Ceridian HCM

Ceridian HCM Holding 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, benefits, workforce management, and talent management functionality; and Powerpay, a cloud HR and payroll solution for the small business market. The company also provides Bureau solutions for payroll and payroll-related services. It sells its solutions through direct sales force and third-party channels. The company was incorporated in 2013 and is headquartered in Minneapolis, Minnesota.

About Shopify

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, Australia, China, and Latin America. The company’s platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing. It also sells custom themes and apps, and registration of domain names; and merchant solutions, which include accepting payments, shipping, and securing working capital. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was incorporated in 2004 and is headquartered in Ottawa, Canada.