PAYLOCITY HOLDING CORP (PCTY)
US70438V1061 - Common Stock
PCTY gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 82 industry peers in the Professional Services industry. Both the health and profitability get an excellent rating, making PCTY a very profitable company, without any liquidiy or solvency issues. PCTY is not overvalued while it is showing excellent growth. This is an interesting combination. With these ratings, PCTY could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
In the past year PCTY was profitable.
PCTY had a positive operating cash flow in the past year.
Each year in the past 5 years PCTY has been profitable.
Each year in the past 5 years PCTY had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.94%, PCTY is in line with its industry, outperforming 54.88% of the companies in the same industry.
With a decent Return On Equity value of 17.76%, PCTY is doing good in the industry, outperforming 74.39% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 18.43%, PCTY belongs to the top of the industry, outperforming 85.37% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PCTY is in line with the industry average of 12.50%.
The last Return On Invested Capital (18.43%) for PCTY is above the 3 year average (11.96%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.94% | ||
| ROE | 17.76% | ||
| ROIC | 18.43% |
ROA(3y)2.88%
ROA(5y)2.97%
ROE(3y)15.45%
ROE(5y)16.05%
ROIC(3y)11.96%
ROIC(5y)12.19%
1.3 Margins
PCTY has a Profit Margin of 14.42%. This is amongst the best in the industry. PCTY outperforms 89.02% of its industry peers.
In the last couple of years the Profit Margin of PCTY has grown nicely.
PCTY's Operating Margin of 18.22% is amongst the best of the industry. PCTY outperforms 86.59% of its industry peers.
In the last couple of years the Operating Margin of PCTY has grown nicely.
The Gross Margin of PCTY (68.85%) is better than 82.93% of its industry peers.
PCTY's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.22% | ||
| PM (TTM) | 14.42% | ||
| GM | 68.85% |
OM growth 3Y1.95%
OM growth 5Y25.66%
PM growth 3Y1.42%
PM growth 5Y3.23%
GM growth 3Y0.58%
GM growth 5Y2.6%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PCTY is creating value.
The number of shares outstanding for PCTY has been increased compared to 1 year ago.
The number of shares outstanding for PCTY has been increased compared to 5 years ago.
PCTY has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 1.95 indicates that PCTY is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of PCTY (1.95) is worse than 65.85% of its industry peers.
PCTY has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 1.95 |
ROIC/WACC2.08
WACC8.84%
2.3 Liquidity
A Current Ratio of 1.13 indicates that PCTY should not have too much problems paying its short term obligations.
The Current ratio of PCTY (1.13) is worse than 63.41% of its industry peers.
A Quick Ratio of 1.13 indicates that PCTY should not have too much problems paying its short term obligations.
PCTY has a worse Quick ratio (1.13) than 63.41% of its industry peers.
PCTY does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
PCTY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 38.36%, which is quite impressive.
Measured over the past years, PCTY shows a very strong growth in Earnings Per Share. The EPS has been growing by 32.16% on average per year.
PCTY shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.62%.
The Revenue has been growing by 25.49% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)38.36%
EPS 3Y40.26%
EPS 5Y32.16%
EPS Q2Q%27.01%
Revenue 1Y (TTM)23.62%
Revenue growth 3Y27.91%
Revenue growth 5Y25.49%
Sales Q2Q%7.94%
3.2 Future
Based on estimates for the next years, PCTY will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.21% on average per year.
PCTY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.99% yearly.
EPS Next Y25.7%
EPS Next 2Y15.66%
EPS Next 3Y15.21%
EPS Next 5YN/A
Revenue Next Year19.48%
Revenue Next 2Y15.83%
Revenue Next 3Y15.2%
Revenue Next 5Y14.99%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 21.58, which indicates a rather expensive current valuation of PCTY.
The rest of the industry has a similar Price/Earnings ratio as PCTY.
The average S&P500 Price/Earnings ratio is at 28.42. PCTY is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 20.07, PCTY is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PCTY is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of PCTY to the average of the S&P500 Index (20.02), we can say PCTY is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.58 | ||
| Fwd PE | 20.07 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PCTY is valued a bit more expensive than the industry average as 68.29% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PCTY is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.25 | ||
| EV/EBITDA | 23.1 |
4.3 Compensation for Growth
PCTY's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PCTY has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as PCTY's earnings are expected to grow with 15.21% in the coming years.
PEG (NY)0.84
PEG (5Y)0.67
EPS Next 2Y15.66%
EPS Next 3Y15.21%
5. Dividend
5.1 Amount
No dividends for PCTY!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
PAYLOCITY HOLDING CORP
NASDAQ:PCTY (6/17/2024, 10:00:02 AM)
138.515
-0.72 (-0.51%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap7.82B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
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Surprises & Revisions
EPS beat(2)
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PT rev (1m)
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EPS NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.58 | ||
| Fwd PE | 20.07 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.84
PEG (5Y)0.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.94% | ||
| ROE | 17.76% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 18.22% | ||
| PM (TTM) | 14.42% | ||
| GM | 68.85% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)38.36%
EPS 3Y40.26%
EPS 5Y
EPS Q2Q%
EPS Next Y25.7%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)23.62%
Revenue growth 3Y27.91%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
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FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
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OCF growth 5Y