Quick Look At HR Software Stocks In The Third Quarter: Paycom (NYSE:PAYC) Vs. Peers

The end of earnings season is always a good time to take a step back and look at who’s excelling (and who’s not so good). Let’s take a look at how HR software stocks fared in the third quarter, starting with Paycom (NYSE:PAYC).

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 5-hour software stocks we track reported a mixed third quarter. As a group, revenues exceeded analyst consensus expectations by 0.7%, while revenue expectations for the next quarter were in line.

While some HR software stocks have done slightly better than others, collectively they have fallen. On average, share prices have fallen 3.1% since the last earnings results.

Paycom (NYSE:PAYC) pioneered the concept of employees doing their own payroll with its “Beti” technology and offers cloud-based human capital management software that helps companies manage the entire employment lifecycle, from recruitment to retirement.

Paycom reported revenue of $493.3 million, up 9.2% year over year. This print was in line with analyst expectations, but overall it was a mixed quarter for the company, narrowly missing analyst EBITDA estimates, but billings were in line with analyst estimates.

Total Paycom revenue

Paycom achieved the highest expected increase for the full year, but had the slowest revenue growth of the entire group. Yet the market seems dissatisfied with the results. The stock is down 6.2% since reporting and is currently trading at $166.08.

Is this the time to buy Paycom? See our full analysis of the revenue results here. This is free for active Edge members.

Operating in a field where companies have traditionally juggled multiple disconnected systems, Paylocity (NASDAQ:PCTY) offers cloud-based human capital management and payroll software solutions that help companies manage their workforce and HR processes.

Paylocity reported revenue of $408.2 million, up 12.5% year over year, and beat analyst expectations by 1.9%. The company had a strong quarter with solid improvement in analyst EBITDA estimates and full-year EBITDA expectations slightly above analyst expectations.

Paylocity delivered the highest analyst estimates that were beaten among its peers. The market seems pleased with the results, as the stock is up 6.2% since reporting. It is currently trading at $148.19.

Is Now the Time to Buy Paylocity? See our full analysis of the revenue results here. This is free for active Edge members.

Dayforce (NYSE:DAY), renamed from Ceridian in January 2024 to highlight its flagship product, provides cloud-based software that enables organizations to manage the entire employee lifecycle, including HR, payroll, workforce management, benefits and talent development.

Dayforce reported revenue of $481.6 million, up 9.5% year over year, in line with analyst expectations. It was a slower quarter as analyst expectations were not met.

Dayforce had the weakest performance compared to analyst estimates in the group. The stock is flat since the results and is currently trading at $68.98.

Read our full analysis of Dayforce’s results here.

Operating in the often overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ:ASUR) provides cloud-based human capital management software and services that help small and mid-sized businesses manage payroll, taxes, time tracking and HR compliance.

Asure Software reported revenue of $36.25 million, up 23.7% year over year. This result exceeded analyst expectations by 1.6%. More broadly, it was a satisfying quarter as it also delivered an impressive figure on analyst expectations, but full-year revenue expectations fell significantly short of analyst expectations.

Asure Software delivered the fastest revenue growth, but had the weakest full-year guidance update among its peers. The stock is flat since reporting and currently trades at $8.14.

Read our full, actionable report on Asure Software here. It’s free for active Edge members.

Once known as the go-to payroll service for small businesses, Paychex (NASDAQ:PAYX) provides payroll processing, HR services, employee benefits administration and insurance solutions for small and mid-sized businesses.

Paychex reported revenue of $1.54 billion, up 16.8% year over year. This number met analysts’ expectations. Zooming out, it was a slower quarter as analysts’ EBITDA estimates were slightly missed.

The stock is down 13% since reporting and is currently trading at $111.78.

Read our full, actionable report on Paychex here, it’s free for active Edge members.

The Fed’s rate hikes in 2022 and 2023 successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without the economy entering a recession, pointing to a soft landing. This stability, combined with recent interest rate cuts (0.5% in September 2024 and 0.25% in November 2024), made for a strong year for the stock market in 2024. Markets continued to rally following Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy as potential corporate tax rates and changes increase uncertainty for 2025.

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