Investors in Paylocity Holding Corporation (NASDAQ:PCTY) had a good week, as its shares rose 6.7% to close at US$168 following the release of its quarterly results. Revenues were US$401m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.50 were also better than expected, beating analyst predictions by 17%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Paylocity Holding

Taking into account the latest results, the most recent consensus for Paylocity Holding from 19 analysts is for revenues of US$1.57b in 2025. If met, it would imply a decent 16% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 17% to US$4.05. Before this earnings report, the analysts had been forecasting revenues of US$1.58b and earnings per share (EPS) of US$3.80 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$195, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Paylocity Holding, with the most bullish analyst valuing it at US$250 and the most bearish at US$155 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Paylocity Holding's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.7% per year. Even after the forecast slowdown in growth, it seems obvious that Paylocity Holding is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Paylocity Holding following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$195, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Paylocity Holding going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Paylocity Holding's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.