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What's in the Cards for Paylocity (PCTY) in Q4 Earnings?
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Paylocity Holding Corporation (PCTY - Free Report) is set to report fourth-quarter fiscal 2016 results on Aug 9. Last quarter, the company delivered a positive earnings surprise of 116.67%. Notably, the stock has surpassed the Zacks Consensus Estimate in all of the preceding four quarters with an average positive earnings surprise of 76.51%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
We remain positive about Paylocity’s regular investments in SaaS technology. Notably, over the past few quarters, clients moving from traditional payroll service providers to SaaS-based services generated a significant portion of the company’s revenues. Therefore, we believe regular investments in technological upgrades, along with product innovations, will continue to boost Paylocity’s top line over the long run. Such initiatives are also likely to have a positive impact on the upcoming results.
Furthermore, higher adoption of Paylocity’s ACA dashboard application which tracks employee count, employee status and health care plan affordability will act as a tailwind over the long run.
However, competition in the payroll processing sector from new entrants as well as existing players such as Automatic Data Processing, Inc. (ADP - Free Report) , Oracle Corporation and SAP SE remains a headwind.
Our proven model does not conclusively show that Paylocity is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP:Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 12 cents. Hence, the difference is 0.00%.
Zacks Rank: Paylocity carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, a 0.00% ESP makes surprise prediction difficult.
Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of companies that are worth considering as our model shows that they have the right combination of the two elements needed to post an earnings beat:
Analog Devices Inc. (ADI - Free Report) , with an Earnings ESP of +2.63% and a Zacks Rank #2.
Alibaba Group Holding Ltd. (BABA - Free Report) , with an Earnings ESP of +28.95% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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What's in the Cards for Paylocity (PCTY) in Q4 Earnings?
Paylocity Holding Corporation (PCTY - Free Report) is set to report fourth-quarter fiscal 2016 results on Aug 9. Last quarter, the company delivered a positive earnings surprise of 116.67%. Notably, the stock has surpassed the Zacks Consensus Estimate in all of the preceding four quarters with an average positive earnings surprise of 76.51%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
We remain positive about Paylocity’s regular investments in SaaS technology. Notably, over the past few quarters, clients moving from traditional payroll service providers to SaaS-based services generated a significant portion of the company’s revenues. Therefore, we believe regular investments in technological upgrades, along with product innovations, will continue to boost Paylocity’s top line over the long run. Such initiatives are also likely to have a positive impact on the upcoming results.
Furthermore, higher adoption of Paylocity’s ACA dashboard application which tracks employee count, employee status and health care plan affordability will act as a tailwind over the long run.
However, competition in the payroll processing sector from new entrants as well as existing players such as Automatic Data Processing, Inc. (ADP - Free Report) , Oracle Corporation and SAP SE remains a headwind.
PAYLOCITY HLDG Price and EPS Surprise
PAYLOCITY HLDG Price and EPS Surprise | PAYLOCITY HLDG Quote
Earnings Whispers
Our proven model does not conclusively show that Paylocity is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 12 cents. Hence, the difference is 0.00%.
Zacks Rank: Paylocity carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, a 0.00% ESP makes surprise prediction difficult.
Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of companies that are worth considering as our model shows that they have the right combination of the two elements needed to post an earnings beat:
Analog Devices Inc. (ADI - Free Report) , with an Earnings ESP of +2.63% and a Zacks Rank #2.
Alibaba Group Holding Ltd. (BABA - Free Report) , with an Earnings ESP of +28.95% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>