Oppenheimer analyst Brian Schwartz maintained a Hold rating on Paylocity (NASDAQ: PCTY) today. The company’s shares closed yesterday at $54.40.
Schwartz said:
“Paylocity reported solid F3Q results with revenue, margins, EBITDA, and EPS above consensus expectations, which should support the company’s valuation. Positively, the good F3Q sales performance flowed through to the guidance with the largest magnitude beat-and-raise quarter for Paylocity in two years, and serves as a data point indicating good execution and costs management. On balance, recurring revenue growth stabilized in F3Q at ~26%, but looks headed to a low-to-mid 20% growth trajectory. This trajectory is slightly above the SaaS industry average, but is shallower than PAYC and ULTI at PCTY’s current size. A shallower recurring revenue growth trajectory likely requires a discount valuation versus its SaaS payroll company peers. Maintain Perform rating from a lack of near-term catalysts.”
According to TipRanks.com, Schwartz is a top 25 analyst with an average return of 26.8% and a 79.2% success rate. Schwartz covers the Technology sector, focusing on stocks such as Ultimate Software, Instructure Inc, and Salesforce.com.
Currently, the analyst consensus on Paylocity is Moderate Buy and the average price target is $57.33, representing a 5.4% upside.
In a report issued on April 23, RBC Capital also downgraded the stock to Hold with a $56 price target.
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Based on Paylocity’s latest earnings report for the quarter ending March 31, the company posted quarterly revenue of $113 million and quarterly net profit of $39.18 million. In comparison, last year the company earned revenue of $90.27 million and had a net profit of $14.8 million.
Based on the recent corporate insider activity of 64 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of PCTY in relation to earlier this year.
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Paylocity Holding Corp. engages in the development and provision of cloud-based software solution. It offers cloud-based payroll, human capital management applications, time labor tracking, benefits administration, and talent management. The company was founded on November 6, 2013 and is headquartered in Arlington Heights, IL.
