PAYLOCITY HOLDING CORP (PCTY)
US70438V1061 - Common Stock
We assign a fundamental rating of 6 out of 10 to PCTY. PCTY was compared to 81 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. These ratings would make PCTY suitable for growth 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.
Each year in the past 5 years PCTY has been profitable.
PCTY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PCTY has a Return On Assets (5.51%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 20.06%, PCTY is in the better half of the industry, outperforming 68.83% of the companies in the same industry.
PCTY's Return On Invested Capital of 15.17% is fine compared to the rest of the industry. PCTY outperforms 79.22% of its industry peers.
PCTY had an Average Return On Invested Capital over the past 3 years of 14.31%. This is below the industry average of 17.86%.
The 3 year average ROIC (14.31%) for PCTY is below the current ROIC(15.17%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.51% | ||
| ROE | 20.06% | ||
| ROIC | 15.17% |
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
With an excellent Profit Margin value of 15.32%, PCTY belongs to the best of the industry, outperforming 87.01% of the companies in the same industry.
In the last couple of years the Profit Margin of PCTY has grown nicely.
PCTY's Operating Margin of 19.55% is amongst the best of the industry. PCTY outperforms 85.71% of its industry peers.
In the last couple of years the Operating Margin of PCTY has grown nicely.
PCTY's Gross Margin of 68.56% is amongst the best of the industry. PCTY outperforms 81.82% 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 | 19.55% | ||
| PM (TTM) | 15.32% | ||
| GM | 68.56% |
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.
The number of shares outstanding for PCTY has been reduced compared to 1 year ago.
The number of shares outstanding for PCTY has been increased compared to 5 years ago.
There is no outstanding debt for PCTY. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 3.34 indicates that PCTY is not in any danger for bankruptcy at the moment.
PCTY's Altman-Z score of 3.34 is in line compared to the rest of the industry. PCTY outperforms 55.84% of its industry peers.
The Debt to FCF ratio of PCTY is 0.97, which is an excellent value as it means it would take PCTY, only 0.97 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 0.97, PCTY is doing good in the industry, outperforming 79.22% of the companies in the same industry.
PCTY has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of PCTY (0.29) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.97 | ||
| Altman-Z | 3.34 |
ROIC/WACC1.61
WACC9.4%
2.3 Liquidity
PCTY has a Current Ratio of 1.32. This is a normal value and indicates that PCTY is financially healthy and should not expect problems in meeting its short term obligations.
PCTY has a Current ratio (1.32) which is comparable to the rest of the industry.
A Quick Ratio of 1.32 indicates that PCTY should not have too much problems paying its short term obligations.
PCTY has a Quick ratio (1.32) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 22.58% over the past year.
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 16.86% in the past year. This is quite good.
Measured over the past years, PCTY shows a very strong growth in Revenue. The Revenue has been growing by 24.57% on average per year.
EPS 1Y (TTM)22.58%
EPS 3Y46.1%
EPS 5Y36.87%
EPS Q2Q%18.57%
Revenue 1Y (TTM)16.86%
Revenue growth 3Y30.19%
Revenue growth 5Y24.57%
Sales Q2Q%14.29%
3.2 Future
The Earnings Per Share is expected to grow by 8.69% on average over the next years. This is quite good.
Based on estimates for the next years, PCTY will show a quite strong growth in Revenue. The Revenue will grow by 10.47% on average per year.
EPS Next Y2.74%
EPS Next 2Y5.56%
EPS Next 3Y8.69%
EPS Next 5YN/A
Revenue Next Year10.75%
Revenue Next 2Y10.36%
Revenue Next 3Y10.67%
Revenue Next 5Y10.47%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
Based on the Price/Earnings ratio of 28.78, the valuation of PCTY can be described as expensive.
PCTY's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.20, PCTY is valued at the same level.
Based on the Price/Forward Earnings ratio of 26.85, the valuation of PCTY can be described as expensive.
Based on the Price/Forward Earnings ratio, PCTY is valued a bit more expensive than 61.04% of the companies in the same industry.
PCTY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.73, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.78 | ||
| Fwd PE | 26.85 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PCTY is valued a bit more expensive than 72.73% 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 | 32.72 | ||
| EV/EBITDA | 28.91 |
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.
PEG (NY)10.52
PEG (5Y)0.78
EPS Next 2Y5.56%
EPS Next 3Y8.69%
5. Dividend
5.1 Amount
No dividends for PCTY!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
PAYLOCITY HOLDING CORP
NASDAQ:PCTY (12/20/2024, 8:00:00 PM)
After market: 196.83 0 (0%)196.83
+0.63 (+0.32%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners79.26%
Inst Owner Change-2.88%
Ins Owners21%
Ins Owner Change-9.19%
Market Cap10.97B
Analysts80.8
Price Target206.77 (5.05%)
Short Float %2.79%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/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)13.87%
Min EPS beat(2)12.35%
Max EPS beat(2)15.39%
EPS beat(4)4
Avg EPS beat(4)12.78%
Min EPS beat(4)9.15%
Max EPS beat(4)15.39%
EPS beat(8)8
Avg EPS beat(8)18.24%
EPS beat(12)12
Avg EPS beat(12)27.25%
EPS beat(16)16
Avg EPS beat(16)31.85%
Revenue beat(2)1
Avg Revenue beat(2)-0.08%
Min Revenue beat(2)-0.16%
Max Revenue beat(2)0.01%
Revenue beat(4)1
Avg Revenue beat(4)-2.77%
Min Revenue beat(4)-9.45%
Max Revenue beat(4)0.01%
Revenue beat(8)4
Avg Revenue beat(8)-1.17%
Revenue beat(12)7
Avg Revenue beat(12)-0.08%
Revenue beat(16)9
Avg Revenue beat(16)0.05%
PT rev (1m)10.71%
PT rev (3m)12.09%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.89%
EPS NY rev (1m)0.06%
EPS NY rev (3m)2.59%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.59%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.78 | ||
| Fwd PE | 26.85 | ||
| P/S | 7.58 | ||
| P/FCF | 32.72 | ||
| P/OCF | 26.5 | ||
| P/B | 9.92 | ||
| P/tB | 12.92 | ||
| EV/EBITDA | 28.91 |
EPS(TTM)6.84
EY3.48%
EPS(NY)7.33
Fwd EY3.72%
FCF(TTM)6.01
FCFY3.06%
OCF(TTM)7.43
OCFY3.77%
SpS25.97
BVpS19.84
TBVpS15.24
PEG (NY)10.52
PEG (5Y)0.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.51% | ||
| ROE | 20.06% | ||
| ROCE | 18.57% | ||
| ROIC | 15.17% | ||
| ROICexc | 31.02% | ||
| ROICexgc | 47.3% | ||
| OM | 19.55% | ||
| PM (TTM) | 15.32% | ||
| GM | 68.56% | ||
| FCFM | 23.16% |
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 Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.97 | ||
| Debt/EBITDA | 0.89 | ||
| Cap/Depr | 97.3% | ||
| Cap/Sales | 5.43% | ||
| Interest Coverage | 547.48 | ||
| Cash Conversion | 113.77% | ||
| Profit Quality | 151.17% | ||
| Current Ratio | 1.32 | ||
| Quick Ratio | 1.32 | ||
| Altman-Z | 3.34 |
F-Score6
WACC9.4%
ROIC/WACC1.61
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)22.58%
EPS 3Y46.1%
EPS 5Y36.87%
EPS Q2Q%18.57%
EPS Next Y2.74%
EPS Next 2Y5.56%
EPS Next 3Y8.69%
EPS Next 5YN/A
Revenue 1Y (TTM)16.86%
Revenue growth 3Y30.19%
Revenue growth 5Y24.57%
Sales Q2Q%14.29%
Revenue Next Year10.75%
Revenue Next 2Y10.36%
Revenue Next 3Y10.67%
Revenue Next 5Y10.47%
EBIT growth 1Y49.6%
EBIT growth 3Y63.14%
EBIT growth 5Y35.86%
EBIT Next Year29.23%
EBIT Next 3Y18.82%
EBIT Next 5Y17.29%
FCF growth 1Y174.86%
FCF growth 3Y52.18%
FCF growth 5Y29.62%
OCF growth 1Y135.78%
OCF growth 3Y45.49%
OCF growth 5Y27.31%