Hold Rating on Paycor HCM Amid Growth Potential and Market Challenges

Analyst Siti Panigrahi from Mizuho Securities reiterated a Hold rating on Paycor HCM (PYCR – Research Report) and keeping the price target at $22.00.

Siti Panigrahi has given his Hold rating due to a combination of factors including Paycor HCM’s robust product strategy and the potential to leverage multiple growth avenues. The company’s focus on expanding its product capabilities and its growth strategies, such as Embedded HCM, cross-selling opportunities, and significant market displacement possibilities, indicate a strong future potential. Furthermore, management’s confidence in achieving sustainable revenue growth over 20% by increasing the price-earnings per member per month (PEPM) and acquiring new customers underpins this positive outlook.
However, despite these promising strategies and growth initiatives, there are areas that temper an outright bullish stance. The current PEPM remains significantly below the opportunity level, suggesting a gradual path to realizing full revenue potential. Additionally, the ongoing efforts to refine go-to-market efficiency and increase partner contributions are yet to fully manifest in financial performance. These factors, combined with the competitive landscape in the payroll and HCM market, have led Panigrahi to maintain a cautious, yet optimistic stance with a Hold rating on Paycor HCM’s stock.

In another report released yesterday, Goldman Sachs also maintained a Hold rating on the stock with a $22.00 price target.

PYCR’s price has also changed moderately for the past six months – from $23.330 to $17.450, which is a -25.20% drop .

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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.