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Investing.com - Guggenheim upgraded Paylocity Holding (NASDAQ:PCTY) from Neutral to Buy on Monday, setting a price target of $180.00, representing nearly 27% upside from the current price of $141.88. According to InvestingPro data, the stock is currently trading near its 52-week low of $135.46.
The upgrade comes less than two months after Guggenheim’s initial Neutral rating on September 25, 2025, with the firm now expressing greater confidence in Paylocity’s fiscal 2026 outlook following the company’s first-quarter results. This optimism comes despite the stock’s significant decline of 27.1% over the past six months.
Guggenheim’s model projects 2% upside to consensus recurring and other revenues with flat New Annual Recurring Revenue growth year-over-year, which it considers achievable even in a challenging macroeconomic environment. Paylocity has maintained impressive 13.3% revenue growth over the last twelve months, with gross profit margins of 69.01%.
The research firm highlighted its growing appreciation for Paylocity’s Broker partner strategy, noting the company appears well-positioned to drive new business leverage through Broker referrals compared to other Human Capital Management vendors.
Guggenheim acknowledged that while the HCM sector faces headwinds from employment challenges and AI adoption in the workforce, it believes "the reward outweighs the risk" for Paylocity, citing shares trading at 5x EV/NTM recurring revenue and management’s proven ability to set and meet expectations. InvestingPro analysis indicates the stock is currently undervalued compared to its Fair Value, despite trading at a P/E ratio of 34.6. Discover more insights and 15 additional ProTips in Paylocity’s comprehensive Pro Research Report, available exclusively to subscribers.
In other recent news, Paylocity Holding has seen several analysts adjust their stock price targets following its fiscal first-quarter results. Cantor Fitzgerald lowered its price target to $190 from $215, noting that Paylocity’s recurring revenue surpassed Street estimates by approximately $6 million, with strong free cash flow and earnings per share. Jefferies also reduced its price target to $180 from $225, despite Paylocity’s recurring revenues beating consensus by around 2% and EBITDA exceeding expectations by 10%. Citizens adjusted its target to $245 from $270, maintaining a Market Outperform rating and highlighting Paylocity’s product differentiation through rapid innovation, including its AI Assistant feature.
BMO Capital set a new target of $185 from $200, describing Paylocity’s results as consistent with previously flagged upside expectations. Mizuho lowered its target to $180 from $220, while still maintaining an Outperform rating, citing peer multiple compression but acknowledging Paylocity’s solid quarter, with recurring and other revenue estimates exceeded by about $6 million and EBITDA by $13 million. These developments reflect the analysts’ varied perspectives on Paylocity’s performance and future potential, with adjustments in stock price targets based on recent earnings and market conditions.
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