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Paylocity
(NASDAQ:PCTY)
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Rating:78Outperform
Price Target:
$163.00
▲(25.23% Upside)
Action:Reiterated
Date:08/05/26
The score is driven primarily by strong financial performance (growth, profitability, and free cash flow strength) and supportive technical trend signals (price above major moving averages with positive momentum). Offsetting this is a growth-premium valuation (P/E ~29 with no dividend yield) and some near-term execution/macro sensitivities highlighted in guidance (acquisition-related margin pressure and interest-income sensitivity).
Positive Factors
Strong free cash flow generation
Consistent, sizable free cash flow (FCF) that scaled to ~$497M in 2026 and historically converts ~66%–95% of net income provides durable funding for R&D, M&A, buybacks and debt reduction. High FCF reduces refinancing risk and supports disciplined capital allocation over the medium term.
Negative Factors
Near-term margin pressure from acquisitions
Acquired assets that are subscale can depress consolidated margins while integration and scaling occur. Expect near-term dilution to adjusted margins and incremental SG&A or implementation spends; successful margin recovery depends on cross-sell and scale that may take multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Consistent, sizable free cash flow (FCF) that scaled to ~$497M in 2026 and historically converts ~66%–95% of net income provides durable funding for R&D, M&A, buybacks and debt reduction. High FCF reduces refinancing risk and supports disciplined capital allocation over the medium term.
Read all positive factors
Paylocity Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue by different business segments, highlighting which areas contribute most to growth and profitability, and indicating where the company might focus future efforts.
Breaks down revenue by different business segments, highlighting which areas contribute most to growth and profitability, and indicating where the company might focus future efforts.
Data provided by:
The Fly
The FlyPaylocity (PCTY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.87B
Dividend YieldN/A
Average Volume (3M)753.16K
Price to Earnings (P/E)29.7
Beta (1Y)0.75
Revenue Growth11.04%
EPS Growth22.52%
CountryUS
Employees6,900
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)4.99
Shares Outstanding53,056,965
10 Day Avg. Volume562,051
30 Day Avg. Volume753,161
Financial Highlights & Ratios
PEG Ratio0.94
Price to Book (P/B)4.63
Price to Sales (P/S)3.19
P/FCF Ratio11.37
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$175.13Price Target Upside34.55% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)8.69
Revenue Forecast (FY)$1.89B
Paylocity Business Overview & Revenue Model
Company Description
Paylocity Holding Corporation delivers a comprehensive suite of cloud-native software solutions, primarily focusing on human capital management (HCM) and payroll processing for businesses and their workforces throughout the United States. At its c...
How the Company Makes Money
Paylocity primarily makes money by selling subscriptions to its cloud HCM platform. Customers (employers) pay recurring fees to access Paylocity’s core modules—such as payroll, tax services, time and attendance, benefits administration, and talent...
Paylocity Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presented a solid set of operating and financial results: double-digit recurring revenue growth, expanding ARPU and client counts, meaningful adjusted EBITDA and free cash flow expansion, successful product launches, and accelerating AI adoption. Management provided constructive FY27 guidance while acknowledging conservative assumptions, near-term margin pressure from recent subscale acquisitions and required investments, and sensitivity to interest-rate-driven interest income. On balance, the company demonstrates strong execution and healthy momentum, with manageable near-term headwinds tied to integration and macro assumptions.Positive Updates
Strong Recurring and Total Revenue Growth
Q4 recurring revenue of $415.6M, up 12.4% year-over-year; Q4 total revenue up 11% YoY. Fiscal '26 recurring revenue grew 12.2% and total revenue grew 11% to roughly $1.8B.
Negative Updates
Acquisitions Are Near-Term Margin Headwinds
Management noted that recent acquisitions (Grayscale, Aidora) are currently subscale from a margin standpoint and represent a slight headwind to margins in fiscal '27.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Recurring and Total Revenue Growth
Q4 recurring revenue of $415.6M, up 12.4% year-over-year; Q4 total revenue up 11% YoY. Fiscal '26 recurring revenue grew 12.2% and total revenue grew 11% to roughly $1.8B.
Read all positive updates
Company Guidance
Paylocity guided Q1 FY27 recurring and other revenue of $414.0–$419.0M (~10% YoY) and total revenue of $439.5–$444.5M (~8% YoY), with adjusted EBITDA of $152.0–$156.0M (or $126.5–$130.5M excluding interest income on client-held funds); for full FY27 they expect recurring and other revenue of $1.777–$1.792B (~8% growth), total revenue of $1.880–$1.895B (~7% growth), adjusted EBITDA of $690–$700M (or $587–$597M excluding client-fund interest, implying ~80 bps of operating leverage at the midpoint). Guidance assumes Q1 average daily client funds of ~$3.0B at a ~340 bps yield (~$25.5M Q1 interest income) and FY27 average daily client funds of ~$3.4–$3.5B at ~300 bps (~$103M interest income), includes two 25‑bp rate cuts (Jan and Mar) and flat workforce levels vs FY26, and reflects a change to amortize deferred contract costs over 8 years (vs 7) that should increase FY27 adjusted EBITDA margin by roughly 120–140 bps.Paylocity Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
78
Positive
Cash Flow
88
Very Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.77B | 1.60B | 1.40B | 1.17B | 852.65M |
| Gross Profit | 1.23B | 1.10B | 960.79M | 807.56M | 565.65M |
| EBITDA | 499.10M | 421.75M | 354.20M | 220.23M | 134.31M |
| Net Income | 269.74M | 227.13M | 206.77M | 140.82M | 90.78M |
Balance Sheet | |||||
| Total Assets | 4.88B | 4.39B | 4.25B | 3.70B | 4.81B |
| Cash, Cash Equivalents and Short-Term Investments | 271.92M | 398.07M | 401.81M | 288.77M | 139.76M |
| Total Debt | 123.45M | 217.89M | 54.45M | 70.27M | 77.52M |
| Total Liabilities | 3.66B | 3.16B | 3.21B | 2.85B | 4.20B |
| Stockholders Equity | 1.22B | 1.23B | 1.03B | 842.86M | 613.46M |
Cash Flow | |||||
| Free Cash Flow | 497.10M | 342.75M | 366.57M | 215.81M | 102.47M |
| Operating Cash Flow | 533.25M | 418.23M | 384.60M | 282.72M | 155.05M |
| Investing Cash Flow | -154.79M | -455.55M | -101.89M | -220.16M | -479.77M |
| Financing Cash Flow | 8.98M | -325.82M | 141.65M | -1.43B | 2.17B |
Paylocity Technical Analysis
Positive
130.16
Price Trends
122.47
Positive
114.64
Positive
124.62
Positive
Market Momentum
7.98
Negative
63.68
Neutral
67.95
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 130.16 is below the 20-day moving average (MA) of 138.81, above the 50-day MA of 122.47, and above the 200-day MA of 124.62, indicating a bullish trend. The MACD of 7.98 indicates Negative momentum. The RSI at 63.68 is Neutral, neither overbought nor oversold. The STOCH value of 67.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PCTY.
Paylocity Risk Analysis
Paylocity disclosed 29 risk factors in its most recent earnings report. Paylocity reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Paylocity Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.87B | 29.72 | 23.44% | ― | 11.04% | 22.52% | |
77 Outperform | $9.01B | 24.46 | 37.43% | ― | 17.26% | ― | |
71 Outperform | $9.66B | 23.13 | 40.43% | 1.03% | 9.23% | 27.04% | |
68 Neutral | $5.31B | 17.01 | 48.90% | 0.45% | 3.60% | 48.92% | |
63 Neutral | $8.62B | -61.92 | -8.97% | ― | 24.09% | 59.33% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
PCTY
Paylocity
148.28
-29.90
-16.78%
PEGA
Pegasystems
32.32
-20.77
-39.13%
PAYC
Paycom
218.13
-5.66
-2.53%
ESTC
Elastic
86.68
8.16
10.39%
TTAN
ServiceTitan, Inc. Class A
90.40
-16.84
-15.70%
Paylocity Corporate Events
Business Operations and StrategyStock BuybackFinancial DisclosuresM&A Transactions
Paylocity Expands Share Buyback and Advances AI Strategy
Positive
May 7, 2026
Paylocity Holding Corporation is a Nasdaq-listed provider of cloud-based HCM, finance and IT software headquartered in Schaumburg, Ill., offering a unified, AI-enabled platform that helps businesses automate HR, finance and IT workflows, manage sp...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.