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Paylocity (PCTY) Stock Jumps 5.2%: Will It Continue to Soar?

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Paylocity (PCTY - Free Report) shares soared 5.2% in the last trading session to close at $202.35. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.1% gain over the past four weeks.

This upswing reflects the strong U.S. market rebound on Tuesday as investors stepped in to buy the dip from a massive sell-off on Monday. The stock market gained momentum after a bounce in treasury yields calmed concerns of slowdown in economic recovery due to the resurgence in COVID-19 cases.

This provider of cloud-based payroll and human-resources software services is expected to post quarterly earnings of $0.28 per share in its upcoming report, which represents a year-over-year change of -12.5%. Revenues are expected to be $162.14 million, up 24.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Paylocity, the consensus EPS estimate for the quarter has been revised 65% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on PCTY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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