Is PAYLOCITY HOLDING CORP (NASDAQ:PCTY) a Strong Candidate for Quality Investing?

In this article we will dive into PAYLOCITY HOLDING CORP (NASDAQ:PCTY) as a possible candidate for quality investing. Investors should always do their own research, but we noticed PAYLOCITY HOLDING CORP showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

What matters for quality investors.

• PAYLOCITY HOLDING CORP has shown strong performance in revenue growth over the past 5 years, with a 24.57% increase. This indicates the company's ability to generate consistent revenue growth and reflects its potential for long-term success.
• PAYLOCITY HOLDING CORP exhibits a strong ROIC excluding cash and goodwill, indicating efficient capital utilization and profitable operations. The 47.3% reflects the company's ability to generate returns on invested capital and underscores its commitment to delivering value to shareholders.
• PAYLOCITY HOLDING CORP demonstrates a well-balanced Debt/Free Cash Flow Ratio of 0.97, indicating effective debt management and strong cash flow generation. This ratio suggests the company has a sustainable financial position and the capacity to allocate capital efficiently.
• With a robust Profit Quality (5-year) ratio of 129.0%, PAYLOCITY HOLDING CORP highlights its ability to consistently generate high-quality profits. This metric reflects the company's effective management and operational excellence in delivering reliable earnings over the long term.
• The 5-year EBIT growth of PAYLOCITY HOLDING CORP has been remarkable, with 35.86% increase. This demonstrates the company's ability to improve its operational efficiency and indicates its competitiveness within the market.
• PAYLOCITY HOLDING CORP demonstrates a remarkable trend where its EBIT 5-year growth exceeds its Revenue 5-year growth. This indicates the company's ability to enhance its profitability through improved cost control and operational efficiency.

What else is there to say on the fundamentals of NASDAQ:PCTY?

ChartMill assigns a Fundamental Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple fundamental indicators and properties.

Taking everything into account, PCTY scores 6 out of 10 in our fundamental rating. PCTY was compared to 80 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 is valued quite expensively, but it does show have an excellent growth rating. These ratings could make PCTY a good candidate for growth investing.

For an up to date full fundamental analysis you can check the fundamental report of PCTY

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.