PAYLOCITY HOLDING CORP (PCTY) Stock Fundamental Analysis
NASDAQ:PCTY - US70438V1061 - Common Stock
178.02 USD
+2.47 (+1.41%)
We assign a fundamental rating of 6 out of 10 to PCTY. PCTY was compared to 83 industry peers in the Professional Services industry. While PCTY belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PCTY shows excellent growth, but is valued quite expensive already. This makes PCTY very considerable for growth 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.
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
The Return On Assets of PCTY (5.17%) 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 71.08% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 15.17%, PCTY belongs to the top of the industry, outperforming 83.13% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PCTY is above the industry average of 12.57%.
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 has a better Profit Margin (14.24%) than 85.54% of its industry peers.
PCTY's Profit Margin has improved in the last couple of years.
PCTY's Operating Margin of 19.06% is amongst the best of the industry. PCTY outperforms 85.54% of its industry peers.
In the last couple of years the Operating Margin of PCTY has grown nicely.
PCTY has a Gross Margin of 68.77%. This is amongst the best in the industry. PCTY outperforms 83.13% of its industry peers.
PCTY's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), PCTY is creating some value.
The number of shares outstanding for PCTY has been reduced compared to 1 year ago.
Compared to 5 years ago, PCTY has more shares outstanding
PCTY has a worse debt/assets ratio than last year.
2.2 Solvency
PCTY has an Altman-Z score of 2.83. 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 2.83, PCTY is in line with its industry, outperforming 46.99% 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.
The Debt to FCF ratio of PCTY (0.47) is better than 79.52% of its industry peers.
PCTY has a Debt/Equity ratio of 0.13. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.13, PCTY is doing good in the industry, outperforming 65.06% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 0.47 | ||
| Altman-Z | 2.83 |
ROIC/WACC1.71
WACC8.88%
2.3 Liquidity
A Current Ratio of 1.14 indicates that PCTY should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.14, PCTY is doing worse than 63.86% of the companies in the same industry.
A Quick Ratio of 1.14 indicates that PCTY should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.14, PCTY is not doing good in the industry: 63.86% of the companies in the same industry are doing better.
| 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.
PCTY shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.84% yearly.
PCTY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.74%.
Measured over the past years, PCTY shows a very strong growth in Revenue. The Revenue has been growing by 23.23% on average per year.
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
PCTY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.32% yearly.
The Revenue is expected to grow by 9.36% on average over the next years. This is quite good.
EPS Next Y3.69%
EPS Next 2Y6.48%
EPS Next 3Y10.24%
EPS Next 5Y16.32%
Revenue Next Year8.36%
Revenue Next 2Y8.76%
Revenue Next 3Y9.69%
Revenue Next 5Y9.36%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 24.83, which indicates a rather expensive current valuation of PCTY.
Compared to the rest of the industry, the Price/Earnings ratio of PCTY is on the same level as its industry peers.
PCTY's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.03.
PCTY is valuated rather expensively with a Price/Forward Earnings ratio of 23.95.
PCTY's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.63, PCTY is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.83 | ||
| Fwd PE | 23.95 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PCTY is valued a bit more expensive than 60.24% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as PCTY.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.65 | ||
| EV/EBITDA | 23.41 |
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)6.73
PEG (5Y)0.81
EPS Next 2Y6.48%
EPS Next 3Y10.24%
5. Dividend
5.1 Amount
PCTY does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:PCTY (9/5/2025, 9:48:00 AM)
178.02
+2.47 (+1.41%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners80.09%
Inst Owner Change-6.28%
Ins Owners19.68%
Ins Owner Change1.22%
Market Cap9.82B
Analysts81.6
Price Target227.83 (27.98%)
Short Float %2.72%
Short Ratio2.23
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)0.72%
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)-1.4%
PT rev (3m)-1.12%
EPS NQ rev (1m)3.28%
EPS NQ rev (3m)0.09%
EPS NY rev (1m)1.77%
EPS NY rev (3m)1.06%
Revenue NQ rev (1m)1.89%
Revenue NQ rev (3m)1.32%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.83 | ||
| Fwd PE | 23.95 | ||
| P/S | 6.16 | ||
| P/FCF | 28.65 | ||
| P/OCF | 23.48 | ||
| P/B | 7.96 | ||
| P/tB | 14.75 | ||
| EV/EBITDA | 23.41 |
EPS(TTM)7.17
EY4.03%
EPS(NY)7.43
Fwd EY4.18%
FCF(TTM)6.21
FCFY3.49%
OCF(TTM)7.58
OCFY4.26%
SpS28.92
BVpS22.37
TBVpS12.07
PEG (NY)6.73
PEG (5Y)0.81
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 | 2.83 |
F-Score8
WACC8.88%
ROIC/WACC1.71
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 Y3.69%
EPS Next 2Y6.48%
EPS Next 3Y10.24%
EPS Next 5Y16.32%
Revenue 1Y (TTM)13.74%
Revenue growth 3Y23.22%
Revenue growth 5Y23.23%
Sales Q2Q%12.16%
Revenue Next Year8.36%
Revenue Next 2Y8.76%
Revenue Next 3Y9.69%
Revenue Next 5Y9.36%
EBIT growth 1Y16.89%
EBIT growth 3Y51.75%
EBIT growth 5Y34.18%
EBIT Next Year27.56%
EBIT Next 3Y17.85%
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%