Paylocity Holding Corporation (PCTY) Stock Analysis & Winston Score

Paylocity Holding Corporation provides cloud-based human capital management and payroll software solutions for workforce in the United States. The company offers Payroll and Tax Services solution to simplifies payroll, automates processes, and manages compliance requirements within one system; and expense management, on demand payment, and garnishment solutions. It also provides human capital management and employee self-service solutions, document library, compliance dashboard, and HR edge; tim

Winston Score History

Politician Trades

4 trades / 12mo

2 Congressional buys and 2 sells on PCTY in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+12.2% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+1.1% YoY

YoY Growth Rate

Slow EPS growth

R&D Spend

$206M/ year

↑ Rising (+15% vs prior year)

12.9% of revenue

In line with sector average (15%)

Investing heavily in future products and technology

Insider Activity

19.9%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$398M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Paylocity Holding Corporation is a rare growth stock that's already generating positive cash flow while growing at 12%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

+0.4% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 56.3M (2021) → 56.5M (2025)

Score breakdown

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Quality

Gross Margin

67.8%

Premium pricing power — 67.8% gross margin

Operating Margin

16.5%

Healthy — 16.5% operating margin

ROCE

4.7%

Weak — 4.7% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+15.6%

Fast-growing sales (15.6% YoY)

EPS YoY

+9.6%

Earnings growing (9.6% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

200%

Turns 200% of profit into real cash

FCF Margin

26.5%

Converts sales into free cash efficiently (26.5%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.13

Conservative — low debt load (0.13)

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

29.2x

Growth-priced — P/E 29.2

P/E above the market average. People are paying up for expected growth.

P/E vs Forward

+15.9

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (29.2 → 13.2)

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Dividends

Not applicable for this business.

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