Paylocity Earnings: Healthy Top-Line Growth Despite Macro Pressures

We maintain our $205 fair value estimate for narrow-moat Paylocity following the release of a robust third-quarter earnings report and improved full-year guidance. Paylocity’s sticky customer base and strong referral-driven pipelines supported healthy revenue growth during the quarter. The firm continues to strategically invest in maintaining a suite of best-in-class solutions to support market share gains. Following the result, we make minor tweaks to our near-term forecasts to account for updated guidance, which are immaterial to our valuation. Shares spiked 12% in after-hours trading yet remain attractive relative to our unchanged fair value estimate.