Paylocity (PCTY) AI Stock Analysis

• Market Cap: $7.91B
• Dividend Yield: N/A
• Average Volume (3M): 632.35K
• Price to Earnings (P/E): 34.7
• Beta (1Y): 0.85
• 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: 54,381,600
• 10 Day Avg. Volume: 717,564
• 30 Day Avg. Volume: 632,350
• 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: 1.12
• Enterprise Value/Revenue: 5.41
• Enterprise Value/Gross Profit: 7.86
• Enterprise Value/Ebitda: 21.10
• 1Y Price Target: $200.64
• Price Target Upside: 44.95% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 7.29
• Revenue Forecast (FY): $1.72B

• Rating: 71 Outperform
• Price Target: $154.00 ▲(11.26% 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 (PCTY) is a leading provider of cloud-based payroll and human capital management (HCM) solutions for medium-sized businesses in the United States. Founded in 1997, the company offers a comprehensive suite of services, including payroll processing, talent management, benefits administration, and time and attendance tracking. Paylocity's platform is designed to streamline HR processes, enhance employee engagement, and provide businesses with valuable data insights, thereby improving overall workforce management.

How the Company Makes Money

Paylocity generates revenue primarily through subscription fees for its software-as-a-service (SaaS) offerings. The company has a diverse range of revenue streams, including payroll processing fees, HCM software subscriptions, and additional services such as employee benefits management and time and attendance tracking. Paylocity's pricing model typically involves a recurring subscription charged on a per-employee basis, which provides a steady stream of income as businesses scale. Additionally, the company may earn revenue from upselling premium features and services to existing clients. Strategic partnerships with various organizations in the HR technology ecosystem also contribute to its revenue, enhancing its service offerings and expanding its market reach.

Paylocity Financial Statement Overview

Summary

Paylocity exhibits strong financial health with consistent revenue and profit growth, effective cost management, and a solid balance sheet. The company has successfully reduced its leverage while maintaining robust returns on equity. Cash flow generation is strong, supporting its growth trajectory. Potential risks include fluctuations in EBIT margins and asset management, which should be monitored to sustain long-term financial stability.

Income Statement

Paylocity has demonstrated consistent revenue growth over the years, with a notable increase from $561 million in 2020 to $1.6 billion in 2025. The gross profit margin has remained stable around 68%, indicating strong cost management. The net profit margin has improved from 11.5% in 2020 to 14.2% in 2025, reflecting enhanced profitability. However, the EBIT margin showed a decline in 2025, which could indicate increased operational costs or investments.

Balance Sheet

The company's debt-to-equity ratio has decreased significantly from 0.44 in 2020 to 0.17 in 2025, indicating reduced leverage and a stronger equity position. Return on equity has remained robust, averaging around 18% in recent years, showcasing effective utilization of shareholder funds. The equity ratio is healthy, suggesting a solid financial structure, although the total assets have fluctuated, which may require monitoring.

Cash Flow

Paylocity's operating cash flow has shown a positive trend, increasing from $112 million in 2020 to $418 million in 2025. The free cash flow growth rate has been strong, particularly in recent years, indicating efficient cash management. The operating cash flow to net income ratio is nearly 2, suggesting strong cash generation relative to earnings. However, the free cash flow to net income ratio has slightly decreased, which could imply increased capital expenditures.

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: Negative
• Last Price: 138.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCTY, the sentiment is Negative. The current price of 138.42 is below the 20-day moving average (MA) of 147.68, below the 50-day MA of 158.47, and below the 200-day MA of 182.22, indicating a bearish trend. The MACD of -5.06 indicates Positive momentum. The RSI at 31.62 is Neutral, neither overbought nor oversold. The STOCH value of 26.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PCTY.

Paylocity Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEGA	76 Outperform	$10.36B	41.36	51.96%	0.15%	17.00%	120.21%
PAYC	75 Outperform	$10.53B	24.61	28.56%	0.83%	9.72%	-2.69%
PCTY	71 Outperform	$7.91B	34.65	20.42%	―	13.30%	2.80%
DAY	71 Outperform	$10.98B	―	-5.71%	―	11.73%	-376.77%
ESTC	65 Neutral	$9.41B	―	-9.65%	―	17.42%	-228.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TTAN	51 Neutral	$8.53B	―	-37.28%	―	26.45%	-74.34%

Paylocity Corporate Events

Paylocity’s Earnings Call: Strong Growth Amid Caution

The recent earnings call for Paylocity Holding Corporation painted a picture of robust growth and strategic advancements, yet also acknowledged the challenges posed by the current economic climate. The sentiment was largely positive, driven by impressive revenue figures and successful product launches, although tempered by cautious guidance adjustments due to macroeconomic uncertainties.

Paylocity Reports Strong Q1 2026 Financial Results

Paylocity Holding Corporation is a leading provider of cloud-based HR, finance, and IT solutions, known for its modern software offerings and unique company culture. The company recently reported its financial results for the first quarter of fiscal year 2026, showcasing strong revenue growth and profitability. Total revenue reached $408.2 million, marking a 12% increase year-over-year, while recurring and other revenue grew by 14% to $378.9 million. The company’s strategic focus on AI-driven solutions and the positive reception of its Paylocity for Finance solution have contributed to its robust performance. Key financial metrics include a GAAP operating income of $74.2 million and an adjusted EBITDA of $146.4 million, both showing significant improvements from the previous year. Despite a slight decrease in GAAP net income to $48.0 million, the company has successfully repurchased $200 million worth of shares, indicating strong shareholder value. Looking ahead, Paylocity has updated its long-term financial targets, aiming for increased adjusted EBITDA and free cash flow margins, reflecting management’s confidence in sustained growth and profitability.

Paylocity’s Earnings Call Highlights Growth and Innovation

Paylocity’s recent earnings call conveyed a strong sentiment of growth and optimism, driven by robust financial performance and strategic initiatives. The company showcased its ability to innovate and execute effectively, despite facing some challenges related to interest rate impacts and product integration. Overall, the outlook remains positive, supported by market recognition and strategic advancements.

Paylocity Reports Strong Fiscal Year 2025 Results

Paylocity Holding Corporation is a leading provider of cloud-based human capital management (HCM), payroll, and spend management software solutions, catering primarily to businesses seeking to streamline their HR and financial processes. Known for its innovative approach and strong workplace culture, Paylocity has been publicly traded since 2014.