PAYLOCITY HOLDING CORP (PCTY) Stock Fundamental Analysis
NASDAQ:PCTY - Nasdaq - US70438V1061 - Common Stock - Currency: USD
Overall PCTY gets a fundamental rating of 6 out of 10. We evaluated PCTY against 80 industry peers in the Professional Services industry. PCTY has an excellent profitability rating, but there are some minor concerns on its financial health. PCTY is valued quite expensive, but it does show an excellent growth. This makes PCTY very considerable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year PCTY was profitable.
In the past year PCTY had a positive cash flow from operations.
PCTY had positive earnings in each of the past 5 years.
In the past 5 years PCTY always reported a positive cash flow from operatings.
1.2 Ratios
PCTY has a Return On Assets (5.17%) which is comparable to the rest of the industry.
With a decent Return On Equity value of 18.41%, PCTY is doing good in the industry, outperforming 70.00% of the companies in the same industry.
PCTY has a Return On Invested Capital of 15.17%. This is amongst the best in the industry. PCTY outperforms 81.25% of its industry peers.
PCTY had an Average Return On Invested Capital over the past 3 years of 14.90%. This is above the industry average of 12.74%.
The last Return On Invested Capital (15.17%) for PCTY is above the 3 year average (14.90%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.17% | ||
| ROE | 18.41% | ||
| ROIC | 15.17% |
ROA(3y)4.62%
ROA(5y)3.73%
ROE(3y)18.38%
ROE(5y)16.95%
ROIC(3y)14.9%
ROIC(5y)12.43%
1.3 Margins
PCTY's Profit Margin of 14.24% is amongst the best of the industry. PCTY outperforms 86.25% of its industry peers.
PCTY's Profit Margin has improved in the last couple of years.
The Operating Margin of PCTY (19.06%) is better than 86.25% of its industry peers.
PCTY's Operating Margin has improved in the last couple of years.
PCTY's Gross Margin of 68.77% is amongst the best of the industry. PCTY outperforms 83.75% of its industry peers.
In the last couple of years the Gross Margin of PCTY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.06% | ||
| PM (TTM) | 14.24% | ||
| GM | 68.77% |
OM growth 3Y23.16%
OM growth 5Y8.88%
PM growth 3Y10.17%
PM growth 5Y4.38%
GM growth 3Y1.21%
GM growth 5Y0.35%
2. Health
2.1 Basic Checks
PCTY has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
PCTY has less shares outstanding than it did 1 year ago.
The number of shares outstanding for PCTY has been increased compared to 5 years ago.
PCTY has a worse debt/assets ratio than last year.
2.2 Solvency
PCTY has an Altman-Z score of 2.85. 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.
Looking at the Altman-Z score, with a value of 2.85, PCTY is in line with its industry, outperforming 47.50% of the companies in the same industry.
PCTY has a debt to FCF ratio of 0.47. This is a very positive value and a sign of high solvency as it would only need 0.47 years to pay back of all of its debts.
PCTY has a better Debt to FCF ratio (0.47) than 81.25% of its industry peers.
A Debt/Equity ratio of 0.13 indicates that PCTY is not too dependend on debt financing.
PCTY has a better Debt to Equity ratio (0.13) than 67.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.47 | ||
| Altman-Z | 2.85 |
ROIC/WACC1.7
WACC8.91%
2.3 Liquidity
PCTY has a Current Ratio of 1.14. This is a normal value and indicates that PCTY is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.14, PCTY is not doing good in the industry: 63.75% of the companies in the same industry are doing better.
PCTY has a Quick Ratio of 1.14. This is a normal value and indicates that PCTY is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.14, PCTY is not doing good in the industry: 63.75% of the companies in the same industry are doing better.
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 | 1.14 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.97% over the past year.
Measured over the past years, PCTY shows a very strong growth in Earnings Per Share. The EPS has been growing by 30.84% on average per year.
PCTY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.74%.
PCTY shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.23% yearly.
EPS 1Y (TTM)8.97%
EPS 3Y30.18%
EPS 5Y30.84%
EPS Q2Q%5.41%
Revenue 1Y (TTM)13.74%
Revenue growth 3Y23.22%
Revenue growth 5Y23.23%
Sales Q2Q%12.16%
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 16.32% on average per year.
Based on estimates for the next years, PCTY will show a quite strong growth in Revenue. The Revenue will grow by 13.63% on average per year.
EPS Next Y1.88%
EPS Next 2Y6.34%
EPS Next 3Y17.28%
EPS Next 5Y16.32%
Revenue Next Year8.3%
Revenue Next 2Y9.24%
Revenue Next 3Y9.86%
Revenue Next 5Y13.63%
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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
PCTY is valuated rather expensively with a Price/Earnings ratio of 24.71.
PCTY's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.51. PCTY is around the same levels.
With a Price/Forward Earnings ratio of 24.25, 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.
The average S&P500 Price/Forward Earnings ratio is at 34.09. PCTY is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.71 | ||
| Fwd PE | 24.25 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PCTY is valued a bit more expensive than the industry average as 63.75% of the companies are valued more cheaply.
PCTY's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.55 | ||
| EV/EBITDA | 23.63 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PCTY does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of PCTY may justify a higher PE ratio.
PCTY's earnings are expected to grow with 17.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)13.14
PEG (5Y)0.8
EPS Next 2Y6.34%
EPS Next 3Y17.28%
5. Dividend
5.1 Amount
PCTY does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:PCTY (8/11/2025, 11:05:05 AM)
177.15
+0.21 (+0.12%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners80.09%
Inst Owner Change0.44%
Ins Owners19.68%
Ins Owner Change-0.94%
Market Cap9.78B
Analysts81.6
Price Target227.23 (28.27%)
Short Float %2.79%
Short Ratio2.47
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)10.67%
Min EPS beat(2)9.93%
Max EPS beat(2)11.41%
EPS beat(4)4
Avg EPS beat(4)10.35%
Min EPS beat(4)4.67%
Max EPS beat(4)15.39%
EPS beat(8)8
Avg EPS beat(8)12.18%
EPS beat(12)12
Avg EPS beat(12)18.36%
EPS beat(16)16
Avg EPS beat(16)25.25%
Revenue beat(2)2
Avg Revenue beat(2)0.73%
Min Revenue beat(2)0.3%
Max Revenue beat(2)1.15%
Revenue beat(4)3
Avg Revenue beat(4)0.5%
Min Revenue beat(4)-0.16%
Max Revenue beat(4)1.15%
Revenue beat(8)4
Avg Revenue beat(8)-1.32%
Revenue beat(12)8
Avg Revenue beat(12)-0.31%
Revenue beat(16)11
Avg Revenue beat(16)0.22%
PT rev (1m)-0.99%
PT rev (3m)-1.39%
EPS NQ rev (1m)0.22%
EPS NQ rev (3m)0.21%
EPS NY rev (1m)0%
EPS NY rev (3m)4.46%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)-0.16%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.71 | ||
| Fwd PE | 24.25 | ||
| P/S | 6.13 | ||
| P/FCF | 28.55 | ||
| P/OCF | 23.39 | ||
| P/B | 7.93 | ||
| P/tB | 14.7 | ||
| EV/EBITDA | 23.63 |
EPS(TTM)7.17
EY4.05%
EPS(NY)7.3
Fwd EY4.12%
FCF(TTM)6.21
FCFY3.5%
OCF(TTM)7.57
OCFY4.27%
SpS28.88
BVpS22.34
TBVpS12.05
PEG (NY)13.14
PEG (5Y)0.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.17% | ||
| ROE | 18.41% | ||
| ROCE | 20.48% | ||
| ROIC | 15.17% | ||
| ROICexc | 20.73% | ||
| ROICexgc | 43.47% | ||
| OM | 19.06% | ||
| PM (TTM) | 14.24% | ||
| GM | 68.77% | ||
| FCFM | 21.49% |
ROA(3y)4.62%
ROA(5y)3.73%
ROE(3y)18.38%
ROE(5y)16.95%
ROIC(3y)14.9%
ROIC(5y)12.43%
ROICexc(3y)21.81%
ROICexc(5y)18.03%
ROICexgc(3y)37.42%
ROICexgc(5y)29.81%
ROCE(3y)20.12%
ROCE(5y)16.79%
ROICexcg growth 3Y31.79%
ROICexcg growth 5Y13.02%
ROICexc growth 3Y20.86%
ROICexc growth 5Y3.12%
OM growth 3Y23.16%
OM growth 5Y8.88%
PM growth 3Y10.17%
PM growth 5Y4.38%
GM growth 3Y1.21%
GM growth 5Y0.35%
F-Score8
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.47 | ||
| Debt/EBITDA | 0.4 | ||
| Cap/Depr | 75.75% | ||
| Cap/Sales | 4.73% | ||
| Interest Coverage | 23.83 | ||
| Cash Conversion | 103.61% | ||
| Profit Quality | 150.91% | ||
| Current Ratio | 1.14 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z | 2.85 |
F-Score8
WACC8.91%
ROIC/WACC1.7
Cap/Depr(3y)96.22%
Cap/Depr(5y)96.41%
Cap/Sales(3y)5.35%
Cap/Sales(5y)5.64%
Profit Quality(3y)150.71%
Profit Quality(5y)137.52%
High Growth Momentum
Growth
EPS 1Y (TTM)8.97%
EPS 3Y30.18%
EPS 5Y30.84%
EPS Q2Q%5.41%
EPS Next Y1.88%
EPS Next 2Y6.34%
EPS Next 3Y17.28%
EPS Next 5Y16.32%
Revenue 1Y (TTM)13.74%
Revenue growth 3Y23.22%
Revenue growth 5Y23.23%
Sales Q2Q%12.16%
Revenue Next Year8.3%
Revenue Next 2Y9.24%
Revenue Next 3Y9.86%
Revenue Next 5Y13.63%
EBIT growth 1Y16.89%
EBIT growth 3Y51.75%
EBIT growth 5Y34.18%
EBIT Next Year27.56%
EBIT Next 3Y21.1%
EBIT Next 5Y18.79%
FCF growth 1Y12.04%
FCF growth 3Y49.54%
FCF growth 5Y37.24%
OCF growth 1Y8.72%
OCF growth 3Y39.19%
OCF growth 5Y29.99%