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Q1 Earnings Outperformers: Paycor (NASDAQ:PYCR) And The Rest Of The HR Software Stocks


Adam Hejl /
2022/07/18 4:53 am EDT
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Heading into the next earnings season, it’s time to take stock of the best and worst performers amongst the HR software stocks in Q1, including Paycor (NASDAQ:PYCR) 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 Q1; on average, revenues beat analyst consensus estimates by 2.82%, while on average next quarter revenue guidance was 1.31% 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 4.73% since earnings, 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 $122.5 million, up 22.7% year on year, beating analyst expectations by 4.21%. It was a strong quarter for the company, with a very optimistic guidance for the next quarter and a decent beat of analyst estimates.

“Paycor delivered impressive revenue growth of 23% year-over-year, fueled by continued strong client growth,” said Raul Villar, Jr., Chief Executive Officer of Paycor.

Paycor Total Revenue

Paycor achieved the strongest analyst estimates beat and highest full year guidance raise of the whole group. The stock is down 5.06% since the results and currently trades at $25.10.

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

Best Q1: 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 $245.9 million, up 32.2% year on year, beating analyst expectations by 1.79%. It was a very strong quarter for the company, with a significant improvement in gross margin and a solid top line growth.

Paylocity Total Revenue

Paylocity scored the fastest revenue growth among its peers. The stock is down 9.37% since the results and currently trades at $171.33.

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

Weakest Q1: 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 $293.3 million, up 25% year on year, beating analyst expectations by 1.33%. It was a slower 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 175 customers to a total of 5,609. The stock is down 18.2% since the results and currently trades at $49.75.

Read our full analysis of Ceridian's results here.

Paychex (NASDAQ:PAYX)

One of the oldest payroll service providers, Paychex provides payroll and human resource (HR) solutions.

Paychex reported revenues of $1.14 billion, up 11.1% year on year, beating analyst expectations by 3.34%. It was a weak quarter for the company, with a decline in gross margin and a slow revenue growth.

Paychex had the slowest revenue growth among the peers. The stock is down 2.08% since the results and currently trades at $117.32.

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

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 $24.3 million, up 22.8% year on year, beating analyst expectations by 3.26%. It was a mixed quarter for the company, with a decent beat of top-line estimates but an underwhelming revenue guidance for the next quarter.

The stock is down 5.11% since the results and currently trades at $5.75.

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

The author has no position in any of the stocks mentioned