HR Software Revenues in Q3: Paycor (NASDAQ:PYCR) Impresses
As we look back at HR software stocks’ third-quarter gains, we examine this quarter’s best and worst performing stocks, including Paycor (NASDAQ:PYCR) and its peers.
Modern HR software has two powerful benefits: cost savings and ease of use. To save costs, businesses of all sizes much prefer the flexibility of cloud-based software delivered through a web browser and paid for on a subscription basis, rather than the hassle and complexity of purchasing and managing business software on-premises. In terms of usability, the consumerization of enterprise software creates seamless experiences that merge multiple standalone processes, such as payroll and compliance, into a single, easy-to-use platform.
The six HR software stocks we track reported a mixed third quarter. As a group, revenues were in line with analyst consensus estimates, while revenues for the next quarter were 1.7% below.
Fortunately, HR software stocks have performed well, with share prices up an average of 14.4% since the last earnings results.
Founded in 1990 in Cincinnati, Ohio, Paycor (NASDAQ: PYCR) provides software for small businesses to manage their payroll and HR needs in one place.
Paycor reported revenue of $167.5 million, up 16.6% year over year. This print exceeded analyst expectations by 3.3%. Overall, it was a strong quarter for the company, with an impressive return to analyst EBITDA estimates and a solid improvement in analyst expectations.
“Paycor had an impressive start to the year, achieving 17% year-over-year revenue growth,” said Raul Villar, Jr., Chief Executive Officer of Paycor.
Paycor’s total revenue
Paycor achieved the highest earnings expectations from analysts and the fastest revenue growth of the entire group. Unsurprisingly, the stock is up 5.9% since reporting and is currently trading at $17.66.
Is Now the Time to Buy Paycor? See our full analysis of earnings results here. It’s free.
Founded in 1997 by payroll software veteran Steve Sarowitz, Paylocity (NASDAQ:PCTY) is a provider of payroll and HR software for small and medium-sized businesses.
Paylocity reported revenue of $363 million, up 14.3% year over year, and beat analyst expectations by 1.9%. The company had a strong quarter with an impressive showing of analyst EBITDA estimates and next quarter revenue expectations exceeding analyst expectations.
Paylocity Total revenue
Paylocity achieved the highest full-year guidance increase among its peers. The market seems pleased with the results, as the stock is up 18.7% since reporting. It is currently trading at $211.88.
Is Now the Time to Buy Paylocity? See our full analysis of earnings results here. It’s free.
Asure (NASDAQ:ASUR), formed from the merger of two small workforce management companies in 2007, offers cloud-based payroll and HR software for small and medium-sized businesses (SMBs).
Asure reported revenue of $29.3 million, flat year-over-year, falling 6.5% short of analyst expectations. It was a disappointing quarter as next quarter’s revenue expectations significantly missed analysts’ expectations and analysts’ EBITDA estimates were significantly missed.
Asure delivered the weakest performance against analyst estimates, the slowest revenue growth and the weakest full-year forecast update in the group. As expected, the stock is down 2.8% since the results and is currently trading at $9.65.
Read our full analysis of Asure’s results here.
Founded in 1998 as one of the first online payroll companies, Paycom (NYSE:PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.
Paycom reported revenue of $451.9 million, up 11.2% year over year. This figure exceeded analyst expectations by 1.1%. Overall, it was a strong quarter as it also showed solid improvement over analysts’ EBITDA estimates.
The stock is up 37.4% since reporting and is currently trading at $236.79.
Read our full, actionable report on Paycom here. It’s free.
Paychex (NASDAQ:PAYX), one of the oldest service providers in the industry, offers payroll and HR software solutions to its customers.
Paychex reported revenue of $1.32 billion, up 2.5% year over year. This print met analysts’ expectations. It was a satisfying quarter as it also delivered a decent gain versus analysts’ EBITDA estimates.
The stock is up 8.9% since reporting and is currently trading at $146.07.
Read our full, actionable report on Paychex here. It’s free.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually declining from its post-pandemic peak and moving closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashy recession signals. This is the much-desired soft landing that many investors were hoping for. The recent interest rate cuts (0.5% in September and 0.25% in November 2024) have boosted the stock market, making 2024 a strong year for equities. Donald Trump’s presidential victory in November fueled additional market gains, sending indexes to record highs in the days following his victory. However, debates over possible corporate tax rates and adjustments continue, raising questions about economic stability in 2025.
Do you want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum stocks and add them to your watchlist. These companies are primed for growth regardless of the political or macroeconomic environment.
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