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Reflecting On HR Software Stocks’ Q3 Earnings: Paylocity (NASDAQ:PCTY)


Jabin Bastian /
2022/01/11 6:11 am EST
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As Q3 earnings season comes to a close, it’s time to take stock of this quarters’ best and worst performers amongst the hr software stocks, including Paylocity (NASDAQ:PCTY) and its peers.

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 been under pressure since the end of last year and HR software stocks have not been spared, with share price down 23.2% since earnings, on average.

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.

“We are off to a very strong start in fiscal 2022 with recurring and total revenue up 34% versus Q1 of last fiscal. Our value proposition of providing the most modern platform in the industry is resonating with clients and prospects of all sizes. During the quarter we also completed the acquisition of Blue Marble, a leading global payroll provider, to further support companies in managing and paying their employees outside the U.S,” said Steve Beauchamp, Chief Executive Officer of Paylocity.

Paylocity Total Revenue

Paylocity pulled off the fastest revenue growth of the whole group. The stock is down 27% since the results and currently trades at $212.10.

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

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.

Asure Software Total Revenue

Asure Software pulled off the highest full year guidance raise but had the slowest revenue growth among its peers. The stock is down 24.6% since the results and currently trades at $7.32.

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

Weakest Q3: Ceridian (NYSE:CDAY)

Founded in 1992 as an outsourced payroll processor and transformed after the 2012 acquisition of Dayforce, Ceridian (NASDAQ: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 softer 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 30% since the results and currently trades at $89.70.

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, with a decline in gross margin.

The stock is down 33.5% since the results and currently trades at $367.50.

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

Paycor (NASDAQ:PYCR)

Found in 1990 in Cincinnati, Ohio Paycor (NASDAQ: PYCR), provides software for small businesses to manage their payroll and HR needs in one place.

Paycor reported revenues of $92.7 million, up 17.2% year on year, beating analyst expectations by 2.93%. It was a decent quarter for the company, with a strong sales guidance for the next quarter.

The stock is down 25.9% since the results and currently trades at $25.60.

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

The author has no position in any of the stocks mentioned