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Paylocity Holding Corp PCTY

Morningstar Rating
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Stock XNAS Rating as of
$132.13 −0.10 (0.08%)
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As of Delayed Price Closed
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Company Report

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Paylocity Earnings: Healthy Top-Line Growth Despite Macro Pressures

Emma Williams,

We maintain our $205 fair value estimate for narrow-moat Paylocity following the release of a robust third-quarter earnings report and improved full-year guidance. Paylocity’s sticky customer base and strong referral-driven pipelines supported healthy revenue growth during the quarter. The firm continues to strategically invest in maintaining a suite of best-in-class solutions to support market share gains. Following the result, we make minor tweaks to our near-term forecasts to account for updated guidance, which are immaterial to our valuation. Shares spiked 12% in after-hours trading yet remain attractive relative to our unchanged fair value estimate.

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Price vs Fair Value

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PCTY is trading at a 262% premium.
Price
$132.13
Fair Value
$641.00
Uncertainty
High
1-Star Price
$916.52
5-Star Price
$471.00
Economic Moat
Bytdhvx
Capital Allocation
Xzgbkmqtn

Bulls Say, Bears Say

Bulls

We expect growing adoption of employee engagement-centric modules and features will entrench Paylocity's platform further into a client's business, increasing client stickiness.

Bears

We expect fierce competitive pressures to limit pricing growth and force Paylocity to maintain high investment in software development and innovation.

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News

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Trading Information

Previous Close Price
$132.23
Day Range
$131.44–134.05
52-Week Range
$129.94–230.52
Bid/Ask
$131.48 / $132.71
Market Cap
$7.46 Bil
Volume/Avg
860,261 / 570,694

Key Statistics

Price/Earnings (Normalized)
20.58
Price/Sales
5.55
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

Paylocity is a provider of payroll and human capital management, or HCM, solutions servicing small- to midsize clients in the United States. The company was founded in 1997 and targets businesses with 10 to 5,000 employees and services about 36,000 clients as of fiscal 2023. Alongside core payroll services, Paylocity offers HCM solutions such as time and attendance and recruiting software, as well workplace collaboration and communication tools.
Sector
Technology
Industry
Software - Application
Stock Style Box
Small Growth
Total Number of Employees
6,100
Website
https://www.paylocity.com

Competitors

Valuation

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Metric
PCTY
ADP
PAYX
Price/Earnings (Normalized)
 20.5826.4725.71
Price/Book Value
 6.7820.9811.12
Price/Sales
 5.555.188.06
Price/Cash Flow
 17.1217.9019.52
Price/Earnings
PCTY
ADP
PAYX

Financial Strength

Metric
PCTY
ADP
PAYX
Quick Ratio
 0.140.120.43
Current Ratio
 1.131.011.24
Interest Coverage
 —13.4657.72
Quick Ratio
PCTY
ADP
PAYX

Profitability

Metric
PCTY
ADP
PAYX
Return on Assets (Normalized)
 8.69%6.59%14.17%
Return on Equity (Normalized)
 39.73%94.48%46.62%
Return on Invested Capital (Normalized)
 37.09%52.00%36.73%
Return on Assets
PCTY
ADP
PAYX
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