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Q3 Earnings Review: HR Software Stocks Led by Asure Software (NASDAQ:ASUR)


Kayode Omotosho /
2022/01/19 6:06 am EST
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Earnings results often give us a good indication what direction the company will take in the months ahead. Heading into the new earnings season, let’s have a look at how Asure Software (NASDAQ:ASUR) and its peers performed in Q3.

HR software benefits from dual trends around costs savings and ease of use. First is the SaaS-ification of businesses, large and small, who much prefer the flexibility of cloud-based, web-browser delivered software paid for on a subscription basis than the hassle and expense of purchasing and managing on-premise enterprise software. Second is the consumerization of business software, whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy to use platforms.

The 6 HR software stocks we track reported a decent Q3; on average, revenues beat analyst consensus estimates by 3.29%, while on average next quarter revenue guidance was 5.13% above consensus. Tech stocks have had a rocky start in 2022 and hr software stocks have not been spared, with share price down 28.4% since earnings, on average.

Best Q3: Asure Software (NASDAQ:ASUR)

Created from the merger of two small workforce management companies in 2007, Asure (NASDAQ:ASUR) provides cloud based payroll and HR software for small and medium-sized businesses (SMBs).

Asure Software reported revenues of $17.9 million, up 12.2% year on year, beating analyst expectations by 4.24%. It was a very strong quarter for the company, with a very optimistic guidance for the next quarter and a full year guidance beating analysts' expectations.

“We have made great strides in advancing our strategic priorities, which we expect will put Asure on a firmer footing to drive future growth and value creation,” said Chairman and CEO, Pat Goepel.

Asure Software Total Revenue

Asure Software achieved the highest full year guidance raise but had the slowest revenue growth of the whole group. The stock is down 26.8% since the results and currently trades at $7.10.

Is now the time to buy Asure Software? Access our full analysis of the earnings results here, it's free.

Paylocity (NASDAQ:PCTY)

Founded by payroll software veteran Steve Sarowitz in 1997, Paylocity (NASDAQ:PCTY) is a provider of payroll and human resources software for small and medium-sized enterprises.

Paylocity reported revenues of $181.6 million, up 33.8% year on year, beating analyst expectations by 4.43%. It was a strong quarter for the company, with a full year guidance beating analysts' expectations and a solid top line growth.

Paylocity Total Revenue

Paylocity scored the fastest revenue growth among its peers. The stock is down 33.7% since the results and currently trades at $192.70.

Is now the time to buy Paylocity? Access our full analysis of the earnings results here, it's free.

Ceridian (NYSE:CDAY)

Founded in 1992 as an outsourced payroll processor and transformed after the 2012 acquisition of Dayforce, Ceridian (NYSE:CDAY) is a provider of cloud based payroll and HR software targeted at mid-sized businesses.

Ceridian reported revenues of $257.2 million, up 25.8% year on year, beating analyst expectations by 1.19%. It was a slower quarter for the company, with a decline in gross margin and decelerating customer growth.

Ceridian had the weakest performance against analyst estimates and weakest full year guidance update in the group. The company added 63 customers to a total of 5,227. The stock is down 37.6% since the results and currently trades at $79.98.

Read our full analysis of Ceridian's results here.

Paycom Software (NYSE:PAYC)

Founded in 1998 as one of the first online payroll companies. Today, Paycom (NYSE:PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.

Paycom Software reported revenues of $256.1 million, up 30.3% year on year, beating analyst expectations by 2.34%. It was an OK quarter for the company, in line with expectations but with a decline in gross margin.

The stock is down 41.6% since the results and currently trades at $322.73.

Read our full, actionable report on Paycom Software here, it's free.

Paychex (NASDAQ:PAYX)

One of the oldest payroll service providers, Paychex provides payroll and human resource (HR) solutions.

Paychex reported revenues of $1.1 billion, up 12.6% year on year, beating analyst expectations by 4.61%. It was a weaker quarter for the company, with a slow revenue growth and a decline in gross margin.

Paychex achieved the strongest analyst estimates beat among the peers. The stock is down 1.92% since the results and currently trades at $124.01.

Read our full, actionable report on Paychex here, it's free.

The author has no position in any of the stocks mentioned