Earnings Beat: Paylocity Holding Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a pretty great week for Paylocity Holding Corporation (NASDAQ:PCTY) shareholders, with its shares surging 10% to US$192 in the week since its latest quarterly results. Revenues were US$363m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.88 were also better than expected, beating analyst predictions by 11%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Paylocity Holding

After the latest results, the 19 analysts covering Paylocity Holding are now predicting revenues of US$1.54b in 2025. If met, this would reflect a credible 6.5% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$3.94, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$1.52b and earnings per share (EPS) of US$4.07 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 7.3% to US$201, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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$175 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. 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 2025 expected to display 8.7% 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 5.7% annually. So it's pretty clear that, while Paylocity Holding's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Paylocity Holding. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Paylocity Holding going out to 2027, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.