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Winners And Losers Of Q1: Asure (NASDAQ:ASUR) Vs The Rest Of The HR Software Stocks


Kayode Omotosho /
2024/06/14 4:07 am EDT

Let's dig into the relative performance of Asure (NASDAQ:ASUR) and its peers as we unravel the now-completed Q1 hr software earnings season.

Modern HR software has two powerful benefits: cost savings and ease of use. For cost savings, businesses large and small much prefer the flexibility of cloud-based, web-browser-delivered software paid for on a subscription basis rather than the hassle and complexity of purchasing and managing on-premise enterprise software. On the usability side, the consumerization of business software creates seamless experiences whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy-to-use platform.

The 6 HR software stocks we track reported a slower Q1; on average, revenues beat analyst consensus estimates by 0.7%. while next quarter's revenue guidance was 0.5% below consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and HR software stocks have had a rough stretch, with share prices down 13.4% on average since the previous earnings results.

Asure (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 reported revenues of $31.65 million, down 4.3% year on year, topping analysts' expectations by 2%. It was a slower quarter for the company, with a miss of analysts' billings estimates. In addition, revenue guidance for the next quarter came in slightly below Wall Street's estimates.

Asure Chairman and CEO Pat Goepel commented, “We continue to execute our growth strategy and are pleased to have delivered another solid performance for the first quarter of 2024.”

Asure Total Revenue

Asure pulled off the biggest analyst estimates beat and highest full-year guidance raise, but had the slowest revenue growth of the whole group. The stock is up 0.5% since the results and currently trades at $7.98.

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

Best Q1: Dayforce (NYSE:DAY)

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

Dayforce reported revenues of $431.5 million, up 16.4% year on year, outperforming analysts' expectations by 1.3%. It was a solid quarter for the company, with accelerating customer growth and a significant improvement in its gross margin.

Dayforce Total Revenue

The stock is down 16.9% since the results and currently trades at $51.02.

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

Weakest Q1: Paychex (NASDAQ:PAYX)

One of the oldest service providers in the industry, Paychex (NASDAQ:PAYX) offers its customers payroll and HR software solutions.

Paychex reported revenues of $1.44 billion, up 4.2% year on year, falling short of analysts' expectations by 1.2%. It was a weak quarter for the company. Revenue unfortunately missed analysts' expectations, although EPS beat. With regards to the full year, revenue guidance missed expectations.

Paychex had the weakest performance against analyst estimates in the group. The stock is up 0.4% since the results and currently trades at $122.02.

Read our full analysis of Paychex's results here.

Paylocity (NASDAQ:PCTY)

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

Paylocity reported revenues of $401.3 million, up 18.1% year on year, surpassing analysts' expectations by 1%. It was a solid quarter for the company, with a significant improvement in its gross margin and strong sales guidance for the next quarter.

Paylocity achieved the fastest revenue growth among its peers. The stock is down 7.3% since the results and currently trades at $138.55.

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

Paycom (NYSE:PAYC)

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

Paycom reported revenues of $499.9 million, up 10.7% year on year, in line with analysts' expectations. It was a slower quarter for the company, with a decline in its gross margin.

The stock is down 24.7% since the results and currently trades at $140.35.

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

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