Paylocity Hlds (PCTY) Stock Forecast & Price Target

Paylocity Holding demonstrated strong financial performance in fiscal 2025, achieving over $1.5 billion in revenue and increasing its client base to 41,650, marking a 7% growth from the previous year. The company experienced a 14% year-over-year increase in recurring revenue, reaching $379 million, underpinned by elevated client workforce levels and improved productivity, while adjusted average revenue per user (ARPU) rose 8% to $35,337. Additionally, Paylocity's adjusted free cash flow (FCF) margin expanded from 11.9% in fiscal 2023 to 14.5% in fiscal 2025, reflecting a positive trend in profitability and financial efficiency over the past three years.

Paylocity Holding experienced a slowdown in revenue growth, with Recurring and Other Revenue increasing by 14.8% in fiscal 2025, a decline from 16.7% in the previous fiscal year. Additionally, external pressures are evident as ADP's net job additions have significantly declined, particularly in smaller organizations, which could further hinder Paylocity's growth prospects. The broader market context also raises concerns, as the company's performance contrasts with the notable gains seen in the S&P 500 and other indices, indicating potential risks for Paylocity's stock amid shifting employment trends.