Paylocity (PCTY) to Report Q4 Earnings: What's in Store?

Paylocity Holding CorporationPCTY is scheduled to report fourth-quarter fiscal 2018 results on Aug 9.

Notably, the company beat estimates in each of the trailing four quarters, delivering an average positive surprise of 220.08%.

In the last reported quarter, the company came up with a positive earnings surprise of 10.64%. Revenues also beat the Zacks Consensus Estimate and improved year over year.

For the fiscal fourth quarter, Paylocity expects revenues in the range of $92.6-$93.6 million.

The Zacks Consensus Estimate is pegged at $93.15 million for revenues and at 12 cents for earnings. The revenues and earnings per share are expected to witness a year-over-year growth of 22.47% and 33.33% respectively.

Let's see how things are shaping up for the upcoming announcement.

Paylocity Holding Corporation Price and EPS Surprise

Paylocity Holding Corporation Price and EPS Surprise | Paylocity Holding Corporation Quote

Factors Likely to Drive Results

Paylocity is performing well backed by the robust performance of its HCM (Human Capital Management) product suite which has resulted in new client additions.

In the last few quarters, a significant portion of revenues was generated from clients moving from traditional payroll service providers to the company's SaaS-based services. This trend is expected to remain accretive to revenues in the fiscal fourth quarter as well.

Recurring revenues, which constituted 95.7% of total revenues in the last reported quarter, is likely to continue its uptrend.

Paylocity's results will continue to benefit from an enriched portfolio. In the last reported quarter, Paylocity completed the acquisition of BeneFLEX, which expanded its product suite further with a host of benefit administration related solutions

Nonetheless, competition in the payroll processing sector from existing players like Paychex, Inc., PAYX and Oracle Corporation ORCL among others remains a pressure on the top line. Increasing competition from new entrants also pose a threat. These factors are expected to increase pricing pressure and affect Paylocity's margins.

What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Paylocity has a Zacks Rank #3 and an Earnings ESP of 0.00%.

A Stock to Consider

Here is a stock that you may consider as our model shows that this has the right combination of elements to post an earnings beat in their upcoming releases:

Science Applications SAIC with an Earnings ESP of +1.70% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Paylocity Holding Corporation (PCTY): Free Stock Analysis Report


Oracle Corporation (ORCL): Free Stock Analysis Report

Paychex, Inc. (PAYX): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics

Earnings Stocks

Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More