William Blair analyst Matthew Pfau has maintained their neutral stance on PYCR stock, giving a Hold rating yesterday.
Matthew Pfau has given his Hold rating due to a combination of factors surrounding Paycor HCM’s performance and future prospects. The company reported fiscal second-quarter results that exceeded expectations, with revenue surpassing consensus estimates and adjusted operating income showing considerable improvement. The acceleration of recurring revenue growth and positive feedback on the company’s growth investments contributed to the performance, alongside strong demand for its Human Capital Management (HCM) solutions. Despite this, the guidance provided for the fiscal third quarter was slightly below expectations, though the fiscal year 2024 forecasts for revenue and adjusted operating income were revised upwards.
The Hold rating also takes into account Paycor’s market positioning and valuation. Pfau acknowledges the company’s historical pattern of surpassing expectations since its IPO, suggesting that the current guidance may allow Paycor to continue this trend. He anticipates potential benefits from increased salesforce investments and expanded indirect sales capacity, which could lead to exceeding the guidance. Looking ahead, he believes that Paycor is well situated to maintain its revenue growth in the 15% to 20% range while also improving margins. However, given that the current valuation seems to reflect these growth expectations, Pfau expects the stock to perform in line with the market, which justifies his Market Perform (Hold) rating.
According to TipRanks, Pfau is a 4-star analyst with an average return of 4.0% and a 51.67% success rate. Pfau covers the Technology sector, focusing on stocks such as Vertex, MiX Telematics, and Alarm.
In another report released yesterday, Jefferies also maintained a Hold rating on the stock with a $22.00 price target.
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Paycor HCM (PYCR) Company Description:
Paycor HCM Inc is a Software-as-a-Service provider of human capital management solutions for small and medium-sized businesses. Its suite of solutions enables organizations to streamline HCM and payroll workflows and achieve regulatory compliance while serving as the single, secure system of record for all employee data.
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