Results: Paylocity Holding Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts
The second-quarter results for Paylocity Holding Corporation (NASDAQ:PCTY) were released last week, making it a good time to revisit its performance. It looks like a credible result overall - although revenues of US$326m were in line with what the analysts predicted, Paylocity Holding surprised by delivering a statutory profit of US$0.67 per share, a notable 18% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Paylocity Holding
Following the latest results, Paylocity Holding's 20 analysts are now forecasting revenues of US$1.39b in 2024. This would be a credible 7.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 6.5% to US$3.17. In the lead-up to this report, the analysts had been modelling revenues of US$1.41b and earnings per share (EPS) of US$3.23 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$193. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Paylocity Holding, with the most bullish analyst valuing it at US$250 and the most bearish at US$155 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Paylocity Holding shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Paylocity Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.3% annually. Even after the forecast slowdown in growth, it seems obvious that Paylocity Holding is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$193, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Paylocity Holding analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Paylocity Holding's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
