2444

Q4 Rundown: Paylocity (NASDAQ:PCTY) Vs Other HR Software Stocks


Radek Strnad /
2022/03/24 7:55 am EDT
Add to Watchlist

Looking back on HR software stocks' Q4 earnings, we examine this quarters’ best and worst performers, 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 Q4; on average, revenues beat analyst consensus estimates by 3.36%, while on average next quarter revenue guidance was 0.81% above consensus. The whole tech sector has been facing a sell-off since late last year, but HR software stocks held their ground better than others, with share price down -0.13% 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 $196 million, up 33.9% year on year, beating analyst expectations by 4.11%. It was a decent quarter for the company, with a strong top line growth and revenue guidance for the next quarter roughly in line with what analysts were expecting.

“Our differentiated value proposition of providing the most modern software in the industry, coupled with strong sales execution, resulted in our 2nd consecutive quarter of 34% revenue growth.” said Steve Beauchamp, Chief Executive Officer of Paylocity.

Paylocity Total Revenue

Paylocity scored the fastest revenue growth and highest full year guidance raise of the whole group. The stock is up 5.03% since the results and currently trades at $206.67.

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

Best Q4: 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 $21.1 million, up 28.4% year on year, beating analyst expectations by 2%. It was a solid quarter for the company, with a significant improvement in gross margin and a strong top line growth.

Asure Software Total Revenue

Asure Software had the smallest earnings beat and weakest full year guidance update among its peers. The stock is down 6.97% since the results and currently trades at $6.27.

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

Slowest Q4: 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 4.63%. It was a mixed quarter for the company, with a decent beat of analyst estimates but a slow revenue growth.

Paychex pulled off the strongest analyst estimates beat but had the slowest revenue growth in the group. The stock is down 0.29% since the results and currently trades at $126.07.

Read our full analysis of Paychex's results here.

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 $282.1 million, up 26.6% year on year, beating analyst expectations by 2.56%. It was an ok quarter for the company, with accelerating customer growth.

The company added 207 customers to a total of 5,434. The stock is down 16.1% since the results and currently trades at $67.97.

Read our full, actionable report on Ceridian 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 $103 million, up 20% year on year, beating analyst expectations by 3.56%. It was a solid quarter for the company, with a very optimistic guidance for the next quarter.

The stock is up 13.8% since the results and currently trades at $28.54.

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

The author has no position in any of the stocks mentioned