PAYLOCITY HOLDING CORP (PCTY) Stock Fundamental Analysis
NASDAQ:PCTY - Nasdaq - US70438V1061 - Common Stock - Currency: USD
Taking everything into account, PCTY scores 6 out of 10 in our fundamental rating. PCTY was compared to 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 shows excellent growth, but is valued quite expensive already. With these ratings, PCTY could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
PCTY had positive earnings in the past year.
PCTY had a positive operating cash flow in the past year.
In the past 5 years PCTY has always been profitable.
Each year in the past 5 years PCTY had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 4.40%, PCTY perfoms like the industry average, outperforming 56.10% of the companies in the same industry.
PCTY has a better Return On Equity (18.81%) than 69.51% of its industry peers.
PCTY's Return On Invested Capital of 15.92% is amongst the best of the industry. PCTY outperforms 84.15% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PCTY is above the industry average of 12.28%.
The 3 year average ROIC (14.31%) for PCTY is below the current ROIC(15.92%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.4% | ||
| ROE | 18.81% | ||
| ROIC | 15.92% |
ROA(3y)3.52%
ROA(5y)3.35%
ROE(3y)17.17%
ROE(5y)16.56%
ROIC(3y)14.31%
ROIC(5y)12.35%
1.3 Margins
Looking at the Profit Margin, with a value of 14.65%, PCTY belongs to the top of the industry, outperforming 85.37% of the companies in the same industry.
PCTY's Profit Margin has improved in the last couple of years.
PCTY has a better Operating Margin (19.38%) than 87.80% of its industry peers.
In the last couple of years the Operating Margin of PCTY has grown nicely.
PCTY's Gross Margin of 68.67% is amongst the best of the industry. PCTY outperforms 82.93% of its industry peers.
PCTY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.38% | ||
| PM (TTM) | 14.65% | ||
| GM | 68.67% |
OM growth 3Y25.31%
OM growth 5Y9.06%
PM growth 3Y9.79%
PM growth 5Y5.08%
GM growth 3Y1.51%
GM growth 5Y0.41%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so PCTY is still creating some value.
PCTY has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, PCTY has more shares outstanding
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
PCTY has an Altman-Z score of 2.35. This is not the best score and indicates that PCTY is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.35, PCTY perfoms like the industry average, outperforming 41.46% of the companies in the same industry.
PCTY has a debt to FCF ratio of 0.73. This is a very positive value and a sign of high solvency as it would only need 0.73 years to pay back of all of its debts.
PCTY has a Debt to FCF ratio of 0.73. This is amongst the best in the industry. PCTY outperforms 81.71% of its industry peers.
A Debt/Equity ratio of 0.20 indicates that PCTY is not too dependend on debt financing.
The Debt to Equity ratio of PCTY (0.20) is better than 60.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 0.73 | ||
| Altman-Z | 2.35 |
ROIC/WACC1.75
WACC9.08%
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.
PCTY has a Quick Ratio of 1.13. This is a normal value and indicates that PCTY is financially healthy and should not expect problems in meeting its short term obligations.
PCTY's Quick ratio of 1.13 is on the low side compared to the rest of the industry. PCTY is outperformed by 63.41% of its industry peers.
The current and quick ratio evaluation for PCTY is rather negative, while it does have 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 10.44%, which is quite good.
The Earnings Per Share has been growing by 36.87% on average over the past years. This is a very strong growth
The Revenue has grown by 14.63% in the past year. This is quite good.
The Revenue has been growing by 24.57% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)10.44%
EPS 3Y46.1%
EPS 5Y36.87%
EPS Q2Q%9.95%
Revenue 1Y (TTM)14.63%
Revenue growth 3Y30.19%
Revenue growth 5Y24.57%
Sales Q2Q%23.91%
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 14.81% on average per year.
PCTY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.36% yearly.
EPS Next Y8.4%
EPS Next 2Y5.36%
EPS Next 3Y7.21%
EPS Next 5Y14.81%
Revenue Next Year13.42%
Revenue Next 2Y10.96%
Revenue Next 3Y10.73%
Revenue Next 5Y10.36%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
A Price/Earnings ratio of 25.58 indicates a quite expensive valuation of PCTY.
The rest of the industry has a similar Price/Earnings ratio as PCTY.
PCTY's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.46.
A Price/Forward Earnings ratio of 24.83 indicates a rather expensive valuation of PCTY.
The rest of the industry has a similar Price/Forward Earnings ratio as PCTY.
PCTY's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.58 | ||
| Fwd PE | 24.83 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PCTY is valued a bit more expensive than 63.41% of the companies in the same industry.
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 | 29.83 | ||
| EV/EBITDA | 24.8 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PCTY has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.04
PEG (5Y)0.69
EPS Next 2Y5.36%
EPS Next 3Y7.21%
5. Dividend
5.1 Amount
PCTY does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
181.39
-4.99 (-2.68%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners80.38%
Inst Owner Change0.6%
Ins Owners19.68%
Ins Owner Change-0.94%
Market Cap10.02B
Analysts82.5
Price Target231.05 (27.38%)
Short Float %2.98%
Short Ratio2.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.04%
Min EPS beat(2)4.67%
Max EPS beat(2)11.41%
EPS beat(4)4
Avg EPS beat(4)10.96%
Min EPS beat(4)4.67%
Max EPS beat(4)15.39%
EPS beat(8)8
Avg EPS beat(8)12.56%
EPS beat(12)12
Avg EPS beat(12)21.2%
EPS beat(16)16
Avg EPS beat(16)27.83%
Revenue beat(2)2
Avg Revenue beat(2)0.5%
Min Revenue beat(2)0.3%
Max Revenue beat(2)0.7%
Revenue beat(4)3
Avg Revenue beat(4)0.21%
Min Revenue beat(4)-0.16%
Max Revenue beat(4)0.7%
Revenue beat(8)4
Avg Revenue beat(8)-1.43%
Revenue beat(12)8
Avg Revenue beat(12)-0.16%
Revenue beat(16)11
Avg Revenue beat(16)0.23%
PT rev (1m)-0.09%
PT rev (3m)-6.81%
EPS NQ rev (1m)0.92%
EPS NQ rev (3m)2.23%
EPS NY rev (1m)0.1%
EPS NY rev (3m)4.46%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)1.55%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.58 | ||
| Fwd PE | 24.83 | ||
| P/S | 6.46 | ||
| P/FCF | 29.83 | ||
| P/OCF | 24.34 | ||
| P/B | 8.29 | ||
| P/tB | 15.69 | ||
| EV/EBITDA | 24.8 |
EPS(TTM)7.09
EY3.91%
EPS(NY)7.3
Fwd EY4.03%
FCF(TTM)6.08
FCFY3.35%
OCF(TTM)7.45
OCFY4.11%
SpS28.1
BVpS21.89
TBVpS11.56
PEG (NY)3.04
PEG (5Y)0.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.4% | ||
| ROE | 18.81% | ||
| ROCE | 19.49% | ||
| ROIC | 15.92% | ||
| ROICexc | 23.07% | ||
| ROICexgc | 49.64% | ||
| OM | 19.38% | ||
| PM (TTM) | 14.65% | ||
| GM | 68.67% | ||
| FCFM | 21.64% |
ROA(3y)3.52%
ROA(5y)3.35%
ROE(3y)17.17%
ROE(5y)16.56%
ROIC(3y)14.31%
ROIC(5y)12.35%
ROICexc(3y)20.75%
ROICexc(5y)19.24%
ROICexgc(3y)32.29%
ROICexgc(5y)28.5%
ROCE(3y)17.51%
ROCE(5y)15.12%
ROICexcg growth 3Y31.83%
ROICexcg growth 5Y6.25%
ROICexc growth 3Y26.81%
ROICexc growth 5Y3.47%
OM growth 3Y25.31%
OM growth 5Y9.06%
PM growth 3Y9.79%
PM growth 5Y5.08%
GM growth 3Y1.51%
GM growth 5Y0.41%
F-Score6
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 0.73 | ||
| Debt/EBITDA | 0.62 | ||
| Cap/Depr | 80.72% | ||
| Cap/Sales | 4.88% | ||
| Interest Coverage | 31.1 | ||
| Cash Conversion | 104.32% | ||
| Profit Quality | 147.73% | ||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 2.35 |
F-Score6
WACC9.08%
ROIC/WACC1.75
Cap/Depr(3y)105.89%
Cap/Depr(5y)103.58%
Cap/Sales(3y)5.83%
Cap/Sales(5y)6.2%
Profit Quality(3y)138.04%
Profit Quality(5y)129.17%
High Growth Momentum
Growth
EPS 1Y (TTM)10.44%
EPS 3Y46.1%
EPS 5Y36.87%
EPS Q2Q%9.95%
EPS Next Y8.4%
EPS Next 2Y5.36%
EPS Next 3Y7.21%
EPS Next 5Y14.81%
Revenue 1Y (TTM)14.63%
Revenue growth 3Y30.19%
Revenue growth 5Y24.57%
Sales Q2Q%23.91%
Revenue Next Year13.42%
Revenue Next 2Y10.96%
Revenue Next 3Y10.73%
Revenue Next 5Y10.36%
EBIT growth 1Y21.94%
EBIT growth 3Y63.14%
EBIT growth 5Y35.86%
EBIT Next Year37.49%
EBIT Next 3Y18.47%
EBIT Next 5Y18.68%
FCF growth 1Y63.59%
FCF growth 3Y52.18%
FCF growth 5Y29.62%
OCF growth 1Y60.9%
OCF growth 3Y45.49%
OCF growth 5Y27.31%