Paylocity Hlds (PCTY) Stock Forecast & Price Target

Paylocity Holding demonstrated solid growth in fiscal 2025, reporting over $1.5 billion in revenue while expanding its client base to 41,650, marking a 7% increase from the previous fiscal year. The company also saw an 8% rise in realized average revenue per user (ARPU), reaching $35,337, which highlights its ability to enhance revenue from existing clients. Furthermore, Paylocity's adjusted free cash flow margins improved significantly, expanding from 11.9% in fiscal 2023 to 14.5% in fiscal 2025, indicating stronger operational efficiency and financial health.

Paylocity Holding's recurring and other revenue growth has slowed to 14.8% in fiscal 2025, decreasing from 16.7% in the prior fiscal year, indicating potential weakening in revenue momentum. Additionally, the declining trend in ADP's net job additions, particularly a more than 20% year-over-year decrease in the 1-19 employee cohort, suggests a challenging environment for Paylocity's growth, given its focus on midmarket customers with an average size of 150 employees. This combination of slowing revenue growth and external job market pressures raises concerns about Paylocity's ability to maintain its growth trajectory moving forward.