Paylocity (PCTY)
NASDAQIndustrialsSoftware - ApplicationSnapshot 2026-09-04
$152.25-1.41%
Close 2026-09-04 · 1-day change
NASDAQIndustrialsSoftware - ApplicationSnapshot 2026-09-04
Intact: The reason to own it still holds.
Paylocity grows revenue about 11%-12% yearly, reaching $1.64 billion next quarter. Profit improves with operating income rising from $127M to $157M in one year. The company buys back $1 billion more stock, showing strong capital return. The stock trades cheap with a PE of 14.76 versus peers at 27.
Revenue growth could slow below 10%, hurting profit gains. Operating income might stall or decline. Competition or market shifts could pressure margins and growth.
The market prices in about 10% revenue growth and values the stock 33% below our fair value near $179. Our fair value is 33% above the Street median, reflecting confidence in growth and profitability.
Breaks if: No further buybacks or cancellation of repurchase program within next year
Expand the share repurchase program by $1 billion, adding to the existing $350 million available.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
PCTY represents a durable compounder with a focus on revenue growth and profitability. The current thesis state is stable, supported by recent strong earnings and consistent management execution.
The market appears to have priced in a neutral valuation, with expectations slightly below peers. There is a low level of fragility in the stock, suggesting that the current pricing reflects justified fundamentals.
Fundamentals are likely to continue showing strength, driven by management's focus on product expansion and AI integration. However, there is an elevated risk due to potential sector headwinds and the recent history of misses in the industry.
The thesis hinges on the performance of sector bellwethers like UBER, ADP, and GRAB. Positive earnings and guidance from these companies could support PCTY, while negative trends could pose risks.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The latest earnings beat supports the growth focus. However, concerns about cloud payroll growth pose a challenge to revenue growth.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: Operating income falls below $127M (2025-Q3 level) next year
Breaks if: Revenue falls below $1.48B (10% below guidance mid) next quarter
Maintain a focus on revenue growth with guidance indicating 11%-12% growth over fiscal year 2025.
Overall, the outlook for PCTY remains positive over the next 1 to 3 years, contingent on sector performance and management execution. Not investment advice.