Paylocity Holding Corporation PCTYis slated to release third-quarter fiscal 2018 results on May 3. Notably, Paylocity has a solid earnings surprise history. The stock surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 235.9%.
Let’s take a look at how things are shaping up prior to this announcement.
Factors to Consider
Paylocity’s regular investments in SaaS technology is a huge tailwind, given its clients’ shift from traditional payroll service providers to the company’s SaaS-based services, which have been significantly contributing to the top line.
Accelerated adoption of Paylocity’s Affordable Care Act (ACA) dashboard application, specializing in tracking employee count, employee status and health care plan affordability is also a positive.
Notably, the company has also been improving its product suite by adding products and via inorganic additions. The company announced the acquisition of BeneFLEX HR Resources – a privately held employee benefit agency in March 2018.
Per Paylocity’s CEO, Steve Beauchamp, this inorganic addition has enriched the company’s product suite with a host of benefit administration related solutions. Apart from this, the acquisition brings in BeneFLEX’s 36 trained employees along with a number of “clients and referring brokers” to Paylocity.
On the second quarter conference call, the company stated that though its R&D expenditure has increased, it positively impacted the adoption and usage rate of its platform. We believe the investments will continue to yield positive results for the company in the soon-to-be reported quarter as well.