Needham upgrades Ceridian to Buy on stabilizing churn, improved win rates

Needham analyst Scott Berg upgraded Ceridian to Buy from Hold with an $82 price target. A positive customer conference confirmed the firm’s recent HCM channel conversations on stabilizing sales churn and improved win rates in the enterprise customer segment, the analyst tells investors in a research note. The firm notes that the stock’s outperformance is due to lower sales churn, which drives a more mature sales force that can better capture demand in its new enterprise segment push where win rates are ticking up due to strong product and new partner involvement. Needham further notes that despite better sales predictability and improved margin leverage, Ceridian shares trade near a five-year low on expected forward revenue basis.