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Investing.com - Citizens has lowered its price target on Paylocity Holding (NASDAQ:PCTY) to $245.00 from $270.00 while maintaining a Market Outperform rating on the stock. Currently trading at $139.33, the stock is near its 52-week low of $137.57 and appears undervalued according to InvestingPro analysis, with RSI suggesting oversold conditions.
The firm continues to view Paylocity as an attractive opportunity for long-term capital appreciation, citing the company’s product differentiation through rapid innovation, including its AI Assistant feature.
Citizens highlighted Paylocity’s expansion into the Office of the CFO with Paylocity for Finance, which incorporates spend management solutions from Airbase and is "starting to see traction in the market, both from a new client perspective and back into the client base."
The firm noted that Paylocity addresses a nearly $20 billion total addressable market, not including the spend management opportunity, and consistently operates above the Rule of 40 with 14% first-quarter recurring revenue growth and 30% first-quarter operating margins. InvestingPro data confirms the company’s impressive 68.9% gross profit margin and solid financial health, with more cash than debt on its balance sheet.
While Paylocity is guiding to approximately 9% recurring revenue growth this year compared to 15% last year, Citizens expressed confidence in the leadership team of CEO Toby Williams, CFO Ryan Glenn, and Executive Chairman Steve Beauchamp. The company has delivered 13.7% revenue growth over the last twelve months according to InvestingPro, which offers 13 additional ProTips and a comprehensive Research Report on Paylocity.
In other recent news, Paylocity Holding reported its first-quarter fiscal 2026 earnings, which showed a mixed financial performance. The company posted earnings per share of $0.86, falling short of the forecasted $1.57, representing a 45.22% miss. However, Paylocity’s revenue exceeded expectations, reaching $408.2 million and marking a 12% increase compared to the previous year. Additionally, BMO Capital adjusted its price target for Paylocity to $185 from $200, while maintaining an Outperform rating, citing consistent results with previous expectations. Mizuho also lowered its price target to $180 from $220, despite acknowledging Paylocity’s solid performance, which included exceeding revenue estimates by $6 million and EBITDA by $13 million. These developments reflect the company’s ongoing financial activities and market assessments.
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