Paylocity (PCTY) AI Stock Analysis

• Market Cap: $8.14B
• Dividend Yield: N/A
• Average Volume (3M): 662.86K
• Price to Earnings (P/E): 37.8
• Beta (1Y): 0.78
• Revenue Growth: 13.30%
• EPS Growth: 2.80%
• Country: US
• Employees: 6,400
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.75
• Shares Outstanding: 54,381,607
• 10 Day Avg. Volume: 565,595
• 30 Day Avg. Volume: 662,862
• PEG Ratio: 4.08
• Price to Book (P/B): 8.17
• Price to Sales (P/S): 6.32
• P/FCF Ratio: 29.42
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 5.41
• Enterprise Value/Gross Profit: 7.86
• Enterprise Value/Ebitda: 21.10
• 1Y Price Target: $199.00
• Price Target Upside: 31.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 7.43
• Revenue Forecast (FY): $1.72B

• Rating: 71 Outperform
• Price Target: $154.00 ▲(2.08% Upside)

Paylocity's strong financial performance and positive earnings call are significant strengths, indicating robust growth and profitability. However, technical indicators suggest bearish momentum, and the high valuation poses a risk. Macroeconomic uncertainty also tempers the outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

AI-Driven Platform Success

The successful integration of AI enhances product offerings, improving customer engagement and operational efficiency, driving future growth.

Increased Financial Targets

Raising financial targets reflects management's confidence in sustained growth and operational improvements, enhancing investor confidence.

Negative Factors

Macroeconomic Uncertainty

Economic uncertainty may impact client expansion and spending, potentially slowing revenue growth and affecting long-term forecasts.

Negative Free Cash Flow Growth

Challenges in sustaining cash flow growth could limit reinvestment capabilities and affect long-term financial flexibility.

Revenue Growth Slowdown

A slowdown in revenue growth may indicate market saturation or increased competition, impacting future profitability and expansion.

Paylocity Business Overview & Revenue Model

Company Description

Paylocity Holding Corporation (PCTY) is a leading provider of cloud-based payroll and human capital management software solutions for mid-sized organizations. Founded in 1997 and headquartered in Schaumburg, Illinois, Paylocity offers a comprehensive suite of services that include payroll processing, employee management, time and labor tracking, and benefits administration. The company operates primarily in the technology sector, focusing on delivering innovative HR solutions that enhance the workforce experience and streamline administrative processes for its clients.

How the Company Makes Money

Paylocity generates revenue primarily through subscription fees for its cloud-based software and services. Clients typically pay an annual subscription fee that varies based on the number of employees and the specific services utilized. The company also earns revenue from implementation services, training, and ongoing customer support. Additional revenue streams come from value-added services such as benefits administration, tax filing, and compliance services. Strategic partnerships with various HR and technology companies enhance Paylocity's offerings and market presence, contributing to its overall earnings by expanding its customer base and enhancing service capabilities.

Paylocity Financial Statement Overview

Summary

Paylocity exhibits strong financial health with consistent revenue growth, robust profitability, and a solid balance sheet. However, the recent slowdown in revenue growth and negative free cash flow growth rate highlight areas for potential improvement.

Income Statement

Paylocity demonstrates strong revenue growth with a TTM revenue increase of 5.85% and consistent gross profit margins around 68%. The net profit margin is healthy at 13.75%, indicating efficient cost management. EBIT and EBITDA margins are robust, reflecting operational efficiency. However, the slight decline in revenue growth rate compared to previous years suggests a potential slowdown in growth momentum.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.12, indicating prudent financial leverage. Return on equity is strong at 17.97%, showcasing effective use of shareholder funds. The equity ratio is stable, reflecting a healthy capital structure. However, the slight increase in debt levels over the periods warrants monitoring.

Cash Flow

Paylocity's cash flow position is stable, with a high free cash flow to net income ratio of 0.92, indicating strong cash generation relative to earnings. However, the negative free cash flow growth rate in the TTM period suggests potential challenges in sustaining cash flow growth. The operating cash flow to net income ratio is moderate, reflecting adequate cash flow management.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.64B	1.60B	1.40B	1.17B	852.65M	635.63M
Gross Profit	1.13B	1.10B	960.79M	807.56M	565.65M	416.33M
EBITDA	420.33M	403.66M	336.52M	215.89M	134.81M	101.02M
Net Income	225.54M	227.13M	206.77M	140.82M	90.78M	70.82M
Balance Sheet
Total Assets	4.24B	4.39B	4.25B	3.70B	4.81B	2.41B
Cash, Cash Equivalents and Short-Term Investments	165.19M	398.07M	401.81M	288.77M	139.76M	206.74M
Total Debt	127.49M	217.89M	54.45M	70.27M	77.52M	74.75M
Total Liabilities	3.13B	3.16B	3.21B	2.85B	4.20B	1.94B
Stockholders Equity	1.10B	1.23B	1.03B	842.86M	613.46M	476.93M
Cash Flow
Free Cash Flow	381.85M	342.75M	366.57M	215.81M	102.47M	86.80M
Operating Cash Flow	413.23M	418.23M	384.60M	282.72M	155.05M	124.85M
Investing Cash Flow	-459.91M	-455.55M	-101.89M	-220.16M	-479.77M	48.42M
Financing Cash Flow	-237.22M	-325.82M	141.65M	-1.43B	2.17B	280.54M

Paylocity Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 150.86
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCTY, the sentiment is Positive. The current price of 150.86 is above the 20-day moving average (MA) of 147.23, above the 50-day MA of 147.46, and below the 200-day MA of 173.70, indicating a neutral trend. The MACD of 0.52 indicates Negative momentum. The RSI at 57.25 is Neutral, neither overbought nor oversold. The STOCH value of 60.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PCTY.

Paylocity Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	76 Outperform	$9.16B	20.23	28.56%	0.90%	9.72%	-2.69%
PCTY	71 Outperform	$8.14B	37.77	20.42%	―	13.30%	2.80%
PEGA	69 Neutral	$9.91B	39.56	51.96%	0.16%	17.00%	120.21%
DAY	67 Neutral	$11.07B	―	-5.71%	―	11.73%	-376.77%
ESTC	65 Neutral	$7.90B	-72.13	-12.84%	―	16.98%	-265.85%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TTAN	52 Neutral	$9.84B	-32.21	-36.41%	―	26.49%	-44.77%

Paylocity Corporate Events

Paylocity Shareholders Approve Key Proposals at Annual Meeting

At the Annual Meeting, Paylocity‘s shareholders voted on several key proposals. The election of directors saw all nominees elected, while KPMG LLP was ratified as the independent accounting firm for the fiscal year ending June 30, 2026. Additionally, shareholders approved the compensation of named executive officers and the Amended and Restated 2023 Equity Incentive Plan.