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HR Software Stocks Q4 Recap: Benchmarking Paycom Software (NYSE:PAYC)


Jabin Bastian /
2022/04/06 7:02 am EDT
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Wrapping up Q4 earnings, we look at the numbers and key takeaways for the HR software stocks, including Paycom Software (NYSE:PAYC) 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 solid Q4; on average, revenues beat analyst consensus estimates by 3.36%, while on average next quarter revenue guidance was 0.81% above consensus. Tech stocks have been under pressure since the end of last year , but HR software stocks held their ground better than others, with the share price up 2.65% since earnings, on average.

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 $284.9 million, up 28.9% year on year, beating analyst expectations by 3.31%. It was a solid quarter for the company, with a strong guidance for the next year and a decent beat of analyst estimates.

“We delivered very strong results in 2021, reflecting outstanding execution and robust demand for Paycom’s differentiated solution,” said Paycom’s founder and CEO, Chad Richison.

Paycom Software Total Revenue

The stock is up 5.87% since the results and currently trades at $354.15.

Read why we think that Paycom Software is one of the best hr software stocks, our full report is free.

Best Q4: Paychex (NASDAQ:PAYX)

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

Paychex reported revenues of $1.27 billion, up 14.7% year on year, beating analyst expectations by 4.64%. It was a strong quarter for the company, with a significant improvement in gross margin and a decent beat of analyst estimates.

Paychex Total Revenue

Paychex pulled off the strongest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 5.14% since the results and currently trades at $139.42.

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

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 but a decline in gross margin.

Paylocity scored the fastest revenue growth and highest full year guidance raise in the group. The stock is up 6.51% since the results and currently trades at $209.58.

Read our full analysis of Paylocity'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 a solid quarter for the company, with accelerating customer growth and guidance for the next quarter above analysts' estimates.

The company added 207 customers to a total of 5,434. The stock is down 18.9% since the results and currently trades at $65.66.

Read our full, actionable report on Ceridian 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 $21.1 million, up 28.4% year on year, beating analyst expectations by 2%. It was a decent quarter for the company, with a significant improvement in gross margin and guidance for the next quarter in line with analysts' estimates.

Asure Software had the weakest performance against analyst estimates and weakest full year guidance update among the peers. The stock is up 0.14% since the results and currently trades at $6.75.

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

The author has no position in any of the stocks mentioned