Sep. 26 at 5:04 PM
Guggenheim initiated coverage on HR software companies Paycom Software and Paylocity Holding as investors assess AI’s impact on workforce-based business models.
Paycom was rated Buy with a
$270 price target, about 24% above its current share price, citing its unique database architecture, product innovation, and structural margin advantages. Analysts highlighted AI-driven tools like Beti (payroll), GONE (absence management), and IWant (new interface) as long-term growth drivers. Managing its own data centers gives Paycom a fixed-cost advantage, supporting top-tier gross and operating margins. Less than 5% of its $ 35B U.S. addressable market is penetrated.
Paylocity was initiated Neutral with no price target. While execution is steady, risks include a weakening labor market, especially among smaller businesses in its primary 50–249 employee segment.
$PAYC $PCTY