Critical Comparison: Ceridian HCM (NYSE:CDAY) versus Braze (NASDAQ:BRZE)

Braze (NASDAQ:BRZE) and Ceridian HCM (NYSE:CDAY) are both mid-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Institutional & Insider Ownership

90.5% of Braze shares are held by institutional investors. 24.0% of Braze shares are held by insiders. Comparatively, 4.5% of Ceridian HCM shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Braze	-22.01%	-25.89%	-14.25%
Ceridian HCM	0.28%	2.03%	0.51%

Volatility and Risk

Braze has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Ceridian HCM has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Braze and Ceridian HCM, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Braze	0	0	17	0	3.00
Ceridian HCM	0	3	4	0	2.57

Braze presently has a consensus price target of $60.50, indicating a potential upside of 74.73%. Ceridian HCM has a consensus price target of $77.00, indicating a potential upside of 30.07%. Given Braze’s stronger consensus rating and higher possible upside, research analysts plainly believe Braze is more favorable than Ceridian HCM.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Braze	$535.87 million	6.57	-$129.17 million	($1.28)	-27.05
Ceridian HCM	$1.45 billion	6.37	-$73.40 million	$0.03	1,973.33

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

Summary

Ceridian HCM beats Braze on 8 of the 14 factors compared between the two stocks.

About Braze

Braze, Inc. operates a customer engagement platform that provides interactions between consumers and brands worldwide. The company offers Braze software development kits that automatically manage data ingestion and deliver mobile and web notifications, in-application/in-browser interstitial messages, and content cards; REST API that can be used to import or export data or to trigger workflows between Braze and brands' existing technology stacks; Partner Data Integrations, which allow brands to sync user cohorts from partners; Data Transformation, in which brands can programmatically sync and transform user data; and Braze Cloud Data Ingestion that enables brands to harness their customer data. It also offers classification products, including segmentation that can define reusable segments of consumers based upon attributes, events, or predictive propensity scores; segment insights, which allows customers to analyze how segments are performing relative to each other across a set of pre-selected key performance indicators; and predictive suite that allows customers to identify groups of consumers that are of critical business value. In addition, the company provides Canvas, an orchestration tool that allows customers to create journeys, mapping out multi-steps, and cross-channel messaging experiences; campaigns, which allows customers to send one set of single-channel or multi-channel messages to be delivered to customers in a particular user segment; event and API triggering; marketing pressure management; and reporting and analytics. Further, it offers personalization products, such as liquid templating platform, connected content platform, content blocks, intelligent timing and channel, personalized variant, and AI item recommendations, and catalogs; and action products. The company was formerly known as Appboy, Inc. and changed its name to Braze, Inc. in November 2017. Braze, Inc. was incorporated in 2011 and is headquartered in New York, New York.

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.