A Look Back at HR Software Stocks' Q4 Earnings: Paycor (NASDAQ:PYCR) Vs The Rest Of The Pack
Jabin Bastian 2023/04/11 5:33 am EDT
The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Paycor (NASDAQ:PYCR) and the rest of the HR software stocks fared in Q4.
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 strong Q4; on average, revenues beat analyst consensus estimates by 6.6%, while on average next quarter revenue guidance was 5.15% above consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but HR software stocks held their ground better than others, with the share prices up 0.87% since the previous earnings results, on average.
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 $132.9 million, up 28.9% year on year, beating analyst expectations by 4.34%. It was a very strong quarter for the company, with very optimistic guidance for the next quarter and a meaningful improvement in gross margin.
“Paycor produced excellent second quarter results highlighted by 29% revenue growth year-over-year, which reflects continued demand and product innovation,” said Raul Villar, Jr., Chief Executive Officer of Paycor.
The stock is down 1.02% since the results and currently trades at $24.3.
Is now the time to buy Paycor? 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 $29.3 million, up 38.7% year on year, beating analyst expectations by 23.3%. It was an impressive quarter for the company, with a significant improvement in gross margin and a solid beat of analyst estimates.
Asure Software scored the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 24.4% since the results and currently trades at $13.97.
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 $1.38 billion, up 8.23% year on year, beating analyst expectations by 2.4%. It was a solid quarter for the company, with a significant improvement in gross margin.
Paychex had the slowest revenue growth in the group. The stock is up 0.29% since the results and currently trades at $109.26.
Read our full analysis of Paychex'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 $370.6 million, up 30% year on year, beating analyst expectations by 1.06%. It was a mixed quarter for the company, with strong top line growth but a decline in gross margin.
Paycom Software had the weakest performance against analyst estimates and weakest full year guidance update among the peers. The stock is down 15.9% since the results and currently trades at $289.94.
Read our full, actionable report on Paycom Software 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 $336.1 million, up 19.1% year on year, beating analyst expectations by 3.39%. It was a decent quarter for the company, with very optimistic guidance for the next quarter but a decline in gross margin.
The company added 145,000 customers to a total of 5,993,000. The stock is down 7.31% since the results and currently trades at $69.23.
Read our full, actionable report on Ceridian here, it's free.
The author has no position in any of the stocks mentioned