Paylocity Holding Corporation
Paylocity Holding Corporation Fundamental Analysis
Paylocity Holding Corporation (PCTY) shows strong financial fundamentals with a PE ratio of 23.35, profit margin of 14.19%, and ROE of 20.52%. The company generates $1.7B in annual revenue with strong year-over-year growth of 13.74%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 75.3/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze PCTY's fundamental strength across five key dimensions:
Efficiency Score
WeakPCTY struggles to generate sufficient returns from assets.
Valuation Score
ModeratePCTY shows balanced valuation metrics.
Growth Score
ExcellentPCTY delivers strong and consistent growth momentum.
Financial Health Score
ModeratePCTY shows balanced financial health with some risks.
Profitability Score
ModeratePCTY maintains healthy but balanced margins.
Key Financial Metrics
Is PCTY Expensive or Cheap?
P/E Ratio
PCTY trades at 23.35 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, PCTY's PEG of 3.65 indicates potential overvaluation.
Price to Book
The market values Paylocity Holding Corporation at 5.07 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 12.40 times EBITDA. This signals the market has high growth expectations.
How Well Does PCTY Make Money?
Net Profit Margin
For every $100 in sales, Paylocity Holding Corporation keeps $14.19 as profit after all expenses.
Operating Margin
Core operations generate 20.13 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.52 in profit for every $100 of shareholder equity.
ROA
Paylocity Holding Corporation generates $3.42 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Paylocity Holding Corporation generates strong operating cash flow of $474.56M, reflecting robust business health.
Free Cash Flow
Paylocity Holding Corporation generates strong free cash flow of $442.89M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.14 in free cash annually.
FCF Yield
PCTY converts 8.01% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
23.35
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.65
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.07
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.30
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.16
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.07
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.26
vs 25 benchmark
How PCTY Stacks Against Its Sector Peers
| Metric | PCTY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 23.35 | 34.79 | Better (Cheaper) |
| ROE | 20.52% | 1185.00% | Weak |
| Net Margin | 14.19% | -133093.00% (disorted) | Strong |
| Debt/Equity | 0.16 | 0.43 | Strong (Low Leverage) |
| Current Ratio | 0.07 | 4.90 | Weak Liquidity |
| ROA | 3.42% | -324805.00% (disorted) | Weak |
PCTY outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Paylocity Holding Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
173.45%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
239.07%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
259.46%
Industry Style: Growth, Innovation, High Beta
High Growth