Bank of America Securities analyst Madeline Brooks has reiterated their neutral stance on PCTY stock, giving a Hold rating today.
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Madeline Brooks’s rating is based on a combination of factors that reflect both positive performance and potential challenges for Paylocity. The company reported strong first-quarter results, with revenue and gross margin improvements driven by scale efficiencies and favorable demand in its product suites. Additionally, management’s introduction of new long-term targets indicates confidence in the company’s ability to achieve sustained profitable growth.
However, Brooks also noted some concerns that influenced the Hold rating. Recurring revenue growth showed signs of normalization, and the company’s flat workforce assumption suggests limited immediate growth from client expansion. Furthermore, while new initiatives such as AI and Paylocity for Finance and IT are promising, they are in early stages and may take time to significantly impact revenue. The increase in operating expenses due to investments in growth also poses a challenge to further margin improvements.
In another report released today, Barclays also maintained a Hold rating on the stock with a $175.00 price target.