Paylocity Holding Corporation Just Recorded A 18% EPS Beat: Here's What Analysts Are Forecasting Next

As you might know, Paylocity Holding Corporation (NASDAQ:PCTY) recently reported its quarterly numbers. Revenues were US$326m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.67 were also better than expected, beating analyst predictions by 18%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Paylocity Holding

Taking into account the latest results, the most recent consensus for Paylocity Holding from 20 analysts is for revenues of US$1.39b in 2024. If met, it would imply a modest 7.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 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.

The analysts reconfirmed their price target of US$193, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Paylocity Holding analyst has a price target of US$250 per share, while the most pessimistic values it at US$155. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. 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. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.3% per year. 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 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 forecasts for Paylocity Holding 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.