Paylocity initiated with a Neutral at Guggenheim

Guggenheim initiated coverage of Paylocity (PCTY) with a Neutral rating and no price target Paylocity has underperformed this year, which the firm sees as due to “the all-encompassing AI narrative” that it will directly impact software vendors that charge customers based on headcount. While the firm acknowledges the threat and understands that premise “could become reality,” it argues that right now it’s “too early to tell.” Fiscal Q1 may come with some risk, but if the company is able to achieve a 2%-plus beat as “investors have likely grown accustomed to over the past 3 quarters,” then the setup for the rest of the year would be attractive, the analyst added.