What To Expect From Paylocity’s (PCTY) Q1 Earnings

Jabin Bastian /
2022/05/04 7:50 am EDT
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Payroll and human resources software provider, Paylocity (NASDAQ:PCTY) will be reporting results tomorrow after the bell. Here's what to expect.

Last quarter Paylocity reported revenues of $196 million, up 33.9% year on year, beating analyst revenue expectations by 4.11%. It was a decent quarter for the company, with a strong top line growth but a decline in gross margin.

Is Paylocity buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Paylocity's revenue to grow 29.8% year on year to $241.6 million, improving on the 8.39% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.91 per share.

Paylocity Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.84%.

Looking at Paylocity's peers in the finance and HR software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Paycom Software delivered top-line growth of 29.8% year on year, beating analyst estimates by 3%. Paycom was up 9.11% on the results. Read our full analysis of Paycom Software's results here.

Tech stocks have had a rocky start in 2022 and software stocks have been swept alongside with it, with share price down on average 16.6% over the last month. Paylocity is down 4.2% during the same time, and is heading into the earnings with analyst price target of $252.3, compared to share price of $203.5.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.