Jefferies has revised its price target for Paylocity (PCTY, Financial), dropping it from $255 to $235, while maintaining a Buy recommendation. According to the analyst, Paylocity's business has shown stability and robust growth, marked by three consecutive strong quarters. This performance indicates the company's growth level is both healthy and sustainable.
Further reflecting optimism, Paylocity's management has raised the forecast for fiscal year 2025 recurring and other revenues, surpassing the expectations from the fiscal third-quarter results. This adjustment suggests that the overall economic environment remains mostly steady.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Paylocity Holding Corp (PCTY, Financial) is $231.85 with a high estimate of $270.00 and a low estimate of $190.00. The average target implies an upside of 19.41% from the current price of $194.16. More detailed estimate data can be found on the Paylocity Holding Corp (PCTY) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, Paylocity Holding Corp's (PCTY, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Paylocity Holding Corp (PCTY, Financial) in one year is $282.27, suggesting a upside of 45.38% from the current price of $194.16. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Paylocity Holding Corp (PCTY) Summary page.
PCTY Key Business Developments
Release Date: May 01, 2025
- Total Revenue: Increased 13% over Q3 of last year.
- Recurring and Other Revenue: $421.1 million, a 15% increase over Q3 of last year.
- Adjusted Gross Profit: 77%, an increase of 110 basis points from Q3 of last fiscal year.
- Adjusted EBITDA: $197.1 million or 43.4% of revenue for the quarter.
- Net Income: $91.5 million for Q3.
- Cash and Cash Equivalents: $477.8 million at the end of the quarter.
- Share Repurchase: $84.9 million or approximately 429,000 shares repurchased in Q3 at an average price of $198.13 per share.
- Interest Income on Client Funds: Estimated $27.4 million in Q4 with an average annual yield of approximately 350 basis points.
- Fiscal Year '25 Revenue Guidance: Total revenue expected to be in the range of $1.580 billion to $1.585 billion, approximately 13% growth over fiscal '24.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Paylocity Holding Corp (PCTY, Financial) reported a 15% growth in recurring and other revenue, driven by its modern software offerings.
- Total revenue increased by 13% compared to the same quarter last year, showcasing strong sales execution.
- The company has successfully integrated Airbase, enhancing its product suite and expanding its market reach.
- Paylocity Holding Corp (PCTY) was recognized as a leader in multiple HCM product categories by G2 and TrustRadius.
- The company continues to invest in AI innovations, improving client efficiency and user experience.
Negative Points
- There is some macroeconomic uncertainty, which may lead to cautious decision-making among clients.
- Operating expenses were flat quarter-over-quarter, which may indicate challenges in cost management.
- The integration of Airbase is still in early stages, and its full impact on revenue is yet to be realized.
- The company faces competitive pricing pressures in the market, particularly with its new CFO Office products.
- There is a potential risk of slower decision-making in the enterprise space due to macroeconomic conditions.
