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Paylocity HoldingPCTY +1.26%84 Return-on-Tangible-Equity is 39.12% as of Jun. 2026, which is 50% above its 10-year median of 26.11. GuruFocus rates PCTY with a GF Score™ of 84/100 and a GF Value™ of $217.19 (Significantly Undervalued). The stock has 2 warning signs investors should review. Among 2,486 Software companies, Paylocity Holding ranks better than 81.62% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Paylocity Holding's annualized net income for the quarter that ended in Jun. 2026 was $241 Mil. Paylocity Holding's average shareholder tangible equity for the quarter that ended in Jun. 2026 was $617 Mil. Therefore, Paylocity Holding's annualized Return-on-Tangible-Equity for the quarter that ended in Jun. 2026 was 39.12%.
The historical rank and industry rank for Paylocity Holding's Return-on-Tangible-Equity or its related term are showing as below:
PCTY'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 6.49 Med: 26.11 Max: 45.31
Current: 45.31
During the past 13 years, Paylocity Holding's highest Return-on-Tangible-Equity was 45.31%. The lowest was 6.49%. And the median was 26.11%.
PCTY's Return-on-Tangible-Equity is ranked better than 81.62% of 2486
companies
in the Software industry
Industry Median: 9.705
vs PCTY: 45.31
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Paylocity Holding Return-on-Tangible-Equity Related Terms
Paylocity Holding Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Paylocity Holding's Return-on-Tangible-Equity can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
PCTY vs TTAN, IDCC, PAYC: Return-on-Tangible-Equity Comparison
For the Software - Application subindustry, Paylocity Holding's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Paylocity Holding Return-on-Tangible-Equity vs Software Industry
For the Software industry and Technology sector, Paylocity Holding's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Paylocity Holding's Return-on-Tangible-Equity falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Jun. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 39.12% mean?
Paylocity Holding (PCTY) has a Return-on-Tangible-Equity of 39.12% as of Jun. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Paylocity Holding and its competitors. This is 50% above median its historical median of 26.11. Over the past decade, Paylocity Holding's Return-on-Tangible-Equity has ranged from 6.49 to 45.31. According to the industry distribution chart, Paylocity Holding ranks #457 out of 2486 companies in the Software industry, placing it in the top 18.4%.
Is Paylocity Holding's Return-on-Tangible-Equity too high?
Paylocity Holding's current Return-on-Tangible-Equity of 39.12% is 50% above median its 10-year median of 26.11. Over the past 10 years, this metric has ranged from a low of 6.49 to a high of 45.31. The Software industry median Return-on-Tangible-Equity is 9.71. Paylocity Holding's value of 39.12% is 303.1% above this industry median. Based on the distribution chart, Paylocity Holding ranks #457 out of 2486 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Paylocity Holding has a GF Score™ of 84/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Paylocity Holding's Return-on-Tangible-Equity compare to TTAN and IDCC?
According to the Software industry distribution chart, Paylocity Holding ranks #457 out of 2486 companies for Return-on-Tangible-Equity. This places Paylocity Holding in the top 18% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 9.71. Paylocity Holding's value of 39.12% is 303.1% above this benchmark. Historically, Paylocity Holding's own Return-on-Tangible-Equity has ranged from 6.49 to 45.31 over the past decade. While the company's 10-year median is 26.11 vs. the industry median of 9.71, Paylocity Holding has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Software company?
The median Return-on-Tangible-Equity among Software companies is 9.71, based on 2,486 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Paylocity Holding's current Return-on-Tangible-Equity of 39.12% is 303.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Paylocity Holding and its competitors. For the Software industry, the median Return-on-Tangible-Equity is 9.71 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Paylocity Holding's current Return-on-Tangible-Equity is 39.12%, which is 50% above median its own 10-year median of 26.11. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Paylocity Holding stock overvalued right now?
Based on GuruFocus' analysis, Paylocity Holding (PCTY) is currently considered Significantly Undervalued. The stock's GF Value™ is $217.19, compared to a current price of $147.32 — trading 32.2% below its estimated fair value. The current Return-on-Tangible-Equity is 39.12%, which is 50% above median its 10-year median of 26.11 and 303.1% above the Software industry median of 9.71. Paylocity Holding's overall GF Score™ is 84/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Paylocity Holding (PCTY), the current Return-on-Tangible-Equity is 39.12% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Paylocity Holding (PCTY) Overvalued in 2026?
Based on GuruFocus' analysis, Paylocity Holding stock appears to be undervalued.
The current stock price of $147.32 is trading 32.2% below its estimated GF Value™ of $217.19.
GuruFocus considers Paylocity Holding to be Significantly Undervalued.
Key valuation signals for PCTY:
Return-on-Tangible-Equity: 39.12% (50% above median its 10-year median of 26.11)
GF Value™: $217.19 vs. price of $147.32 (32.2% below fair value)
Industry Position: 303.1% above the Software median (#457 of 2486)
No single metric tells the full story. See the PCTY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Paylocity is a cloud-based human capital management provider offering payroll, compliance, and human resources management solutions. With the addition of expense and IT management modules, Paylocity unifies back-office operations spanning HR, finance, and IT on a single platform and bills customers on a subscription basis. The firm's customer base skews toward the midmarket and is primarily based in the US. As of fiscal 2025, Paylocity has nearly 42,000 customers.
84GF Score
Get the complete analysis for PCTY
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