Needham analyst Joshua Reilly has maintained their neutral stance on PAYC stock, giving a Hold rating today.
Joshua Reilly has given his Hold rating due to a combination of factors including Paycom’s recent performance and future outlook. The company reported a strong first quarter with revenue surpassing expectations, driven by successful changes in their go-to-market strategy. This indicates that management’s efforts to boost growth are yielding positive results. Additionally, improvements in customer support and product offerings are enhancing upsell opportunities and customer retention.
Despite these positive developments, Reilly notes that while revenue guidance for FY25 has been increased, the expected growth in adjusted EBITDA is relatively modest at 10%. This suggests that while the company is on a positive trajectory, the growth in profitability may not be as robust as revenue growth. Therefore, the Hold rating reflects a balanced view of Paycom’s current strengths and the potential challenges in achieving higher profitability.