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Paycor Hcm, Inc. (PYCR)
:PYCR
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Paycor HCM
(NASDAQ:PYCR)
68Neutral
Positive Factors
Acquisition
The announced acquisition by PAYX includes a 19% premium over Paycor's 30-day average share price, indicating a favorable purchase price for shareholders.
Cost Synergies
PAYX expects significant cost synergies exceeding $80 million in the near term, which should enhance operational efficiencies post-acquisition.
Negative Factors
Market Competition
The detailed review of the 14C filing strongly suggests that no new bids will emerge for PYCR, indicating limited competition for acquisition.
Revenue Growth
Revenue growth slowed to 13% from 17% in the previous quarter.
Stock Rating
The analyst is reducing the rating of PYCR to Neutral and aligning the price target with the acquisition price, suggesting limited potential for further positive stock movement.
Paycor HCM (PYCR) vs. S&P 500 (SPY)
Market Cap
$4.08B
Dividend YieldN/A
Average Volume (3M)2.08M
Price to Earnings (P/E)―
Beta (1Y)0.80
Revenue Growth15.72%
EPS Growth74.59%
CountryUS
Employees2,900
SectorTechnology
Sector Strength44
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.12
Shares Outstanding181,771,940
10 Day Avg. Volume1,193,306
30 Day Avg. Volume2,080,696
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.82
Price to Cash Flow (P/CF)27.50
P/FCF Ratio27.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.50Price Target Upside0.31% Upside
Rating ConsensusHold
Number of Analyst Covering13
Paycor HCM Business Overview & Revenue Model
Company DescriptionPaycor HCM, Inc. provides software-as-a-service (SaaS) human capital management (HCM) solutions for small and medium-sized businesses (SMBs) primarily in the United States. It offers cloud-native platform to address the comprehensive people management needs of SMB leaders. The company's SaaS based people management products include Core HCM and Payroll, a calculation engine that enables real-time changes in payroll processing; Workforce Management, a solution with flexible time entry, overtime calculations, and scheduling capabilities with real-time payroll synchronization; Benefits Administration, a decision support solution to help leaders to streamline and optimize company's benefits administration; Talent Management, an integrated compensation and performance management solution; and Employee Engagement, a solution with interactive learning tools and AI-powered surveys. It serves manufacturing, healthcare, restaurant, retail, professional services, nonprofit, and education industries through its direct sales teams. The company was founded in 1990 and is headquartered in Cincinnati, Ohio.
How the Company Makes MoneyPaycor HCM generates revenue primarily through the subscription fees charged for its software-as-a-service (SaaS) platform. Businesses pay recurring fees to access Paycor's suite of HCM solutions, which are typically based on the number of employees and the specific modules utilized. Additionally, Paycor may earn revenue from implementation and training services, which help clients effectively integrate and use their software. Strategic partnerships with other technology and service providers can also contribute to revenue by expanding Paycor's service offerings and customer base.
Paycor HCM Financial Statement Overview
Summary
Paycor HCM demonstrates positive revenue growth and a strong gross profit margin, but is challenged by continued net losses, impacting profitability metrics. The balance sheet is robust with no debt, supporting financial stability. Cash flow improvements are noteworthy, reflecting enhanced operational efficiency despite ongoing net losses.Income Statement
Paycor HCM has shown significant growth in revenue, with a TTM growth rate of approximately 7% from the previous annual period. However, the company is still operating at a net loss, reflected in a negative net profit margin of -3.06% for the TTM. The gross profit margin remains strong at 59.75%, indicating efficient cost management relative to revenue. Despite improvements, the negative EBIT and EBITDA margins suggest challenges in achieving profitability at the operating level.70
Positive
Balance Sheet
The balance sheet reflects a solid equity position with a debt-to-equity ratio of 0, indicating no debt burden. The equity ratio is also strong at 46.24%, showcasing a healthy capital structure. Return on equity is negative due to ongoing net losses, but the company maintains a robust asset base and liquidity with substantial cash reserves compared to liabilities.75
Positive
Cash Flow
Paycor HCM demonstrates positive cash flow trends, with a significant increase in free cash flow from a negative position to positive $110.85 million TTM. The operating cash flow to net income ratio is strong at 5.54, indicating effective cash conversion despite net losses. The free cash flow to net income ratio is notable at -5.17, highlighting the company's improvement in cash generation relative to its earnings.80
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 699.73M | 654.95M | 552.69M | 429.39M | 352.78M | 327.91M | Gross Profit |
| 418.20M | 431.71M | 365.55M | 261.20M | 198.29M | 188.23M | EBIT |
| -18.96M | -55.45M | -104.66M | -139.62M | -90.75M | -85.70M | EBITDA |
| 105.06M | 86.09M | 31.12M | 23.89M | 55.55M | 47.51M | Net Income Common Stockholders |
| -21.43M | -58.94M | -93.22M | -108.02M | -72.48M | -67.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 114.57M | 117.96M | 95.23M | 133.04M | 2.63M | 828.00K | Total Assets |
| 2.83B | 2.61B | 2.54B | 3.13B | 2.01B | 2.01B | Total Debt |
| 12.77M | 20.43M | 16.06M | 912.00K | 49.10M | 24.43M | Net Debt |
| -101.80M | -104.51M | -79.17M | -132.13M | 46.47M | 23.61M | Total Liabilities |
| 1.52B | 1.32B | 1.27B | 1.85B | 883.89M | 821.12M | Stockholders Equity |
| 1.31B | 1.29B | 1.27B | 1.28B | 878.64M | 953.33M |
| Cash Flow | Free Cash Flow | ||||
| 110.85M | 77.69M | -18.70M | -18.14M | -23.78M | -29.59M | Operating Cash Flow |
| 118.71M | 90.00M | 48.12M | 24.35M | 10.77M | 88.00K | Investing Cash Flow |
| -66.80M | -108.92M | -192.96M | -84.55M | -52.58M | 121.53M | Financing Cash Flow |
| 3.33M | 50.47M | -659.05M | 1.18B | 55.32M | -20.88M |
Paycor HCM Technical Analysis
Positive
22.43
Price Trends
22.25
Positive
20.51
Positive
16.90
Positive
Market Momentum
0.09
Positive
68.26
Neutral
68.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PYCR, the sentiment is Positive. The current price of 22.43 is above the 20-day moving average (MA) of 22.38, above the 50-day MA of 22.25, and above the 200-day MA of 16.90, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 68.26 is Neutral, neither overbought nor oversold. The STOCH value of 68.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PYCR.
Paycor HCM Risk Analysis
Paycor HCM disclosed 42 risk factors in its most recent earnings report. Paycor HCM 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
Paycor HCM Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.53B | 24.53 | 34.88% | 0.69% | 11.19% | 51.03% | |
76 Outperform | $122.40B | 31.38 | 83.72% | 1.91% | 7.09% | 11.51% | |
75 Outperform | $63.44B | 121.97 | 6.15% | ― | 16.94% | -62.24% | |
75 Outperform | $10.41B | 47.84 | 20.49% | ― | 15.96% | 31.76% | |
72 Outperform | $311.97B | 92.47 | 7.12% | 0.65% | 9.55% | -2.28% | |
68 Neutral | $4.08B | ― | -1.66% | ― | 15.72% | 74.59% | |
58 Neutral | $21.03B | 10.58 | -16.29% | 2.47% | 4.38% | -23.63% |
* Technology Sector Average
Performance Comparison
PYCR
Paycor HCM
22.43
3.57
18.93%
ADP
Automatic Data Processing
300.83
60.68
25.27%
SAP
SAP AG
268.00
73.73
37.95%
WDAY
Workday
238.49
-33.95
-12.46%
PAYC
Paycom
218.75
22.02
11.19%
PCTY
Paylocity
186.33
18.63
11.11%
Paycor HCM Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: 1.31% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call presented strong revenue growth, strategic partnerships, and product innovations, leading to improved margins and cash flow. However, challenges such as seasonal cash flow lows and the slow impact of the embedded channel were noted. Overall, the positive aspects significantly outweighed the negatives.Highlights
Revenue and Growth Metrics
Paycor reported a 17% year-over-year increase in total revenues, reaching $167 million for the quarter. Recurring revenue grew 16%, driven by a 5% increase in average employees on the platform and an 11% increase in PEPM.
Strategic Partnerships and Product Expansion
Paycor signed several new embedded partners, reaching double-digit partnerships. The embedded channel showed growth with average employees per company tripling the current average.
AI and Product Innovations
Paycor launched Paycor Assistant, an AI-powered HR companion. The Paycor Integration Platform was introduced, offering prebuilt connections to over 300 technology partners.
Improved Margins and Free Cash Flow
Adjusted operating income increased over 40% to $23 million with margins of 13.6%, up 250 basis points from last year. Free cash flow margin improved nearly 15 percentage points compared to the prior year.
Positive Market Reception and Industry Accolades
Paycor ranked among the top 5 vendors in Sapient Insights Group's Annual HR Systems rankings and was recognized in Nucleus Research's Top Leader Quadrant for its talent acquisition suite.
Lowlights
Seasonal Low Free Cash Flow
Despite improvement, the first quarter remains the seasonally lowest cash flow quarter due to the timing of annual bonus payouts.
Embedded Revenue Impact
While embedded HCM channel growth is progressing, its impact on overall revenue remains limited and is expected to take time before materially affecting revenue figures.
Slightly Longer Deal Cycles in Upmarket
The top end of the book experienced slightly longer deal cycles, with an increase of about a week, although not materially affecting overall dynamics.
Company Guidance
During Paycor's Q1 2025 earnings call, the company reported a 17% year-over-year revenue growth, with recurring revenue rising by 16%. The average number of employees on their platform increased by 5%, while the per employee per month (PEPM) revenue expanded by 11%. They have successfully expanded their client base to approximately 31,000 customers, managing 2.6 million employees. Paycor's embedded HCM solution continues to gain traction, contributing 2 points to employee growth and achieving double-digit partnerships. The company expects total revenues of $726 million to $733 million for fiscal year 2025, reflecting 12% growth, and anticipates adjusted operating income between $127 million to $130 million. These results align with their strategic focus on sales efficiency, product innovation, and cash flow acceleration.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.