Paycor Stock Rises 45% in 6 Months: Is There More Room to Run?

Paycor HCM (PYCR Quick QuotePYCR – Free Report) shares have rallied 44.6% over the trailing six months, outperforming the Zacks Computer & Technology sector’s return of 2.4% and the Zacks Internet – Software industry’s growth of 10.9%.

Meanwhile, the company has also outpaced industry peers, including Vertex (VERX Quick QuoteVERX – Free Report) , Datadog (DDOG Quick QuoteDDOG – Free Report) and Chegg (CHGG Quick QuoteCHGG – Free Report) .

Over the trailing six months, shares of Vertex and Datadog returned 28.2% and 21.6%, respectively, while Chegg plunged 44.1%.

PYCR’s outperformance can be attributed to strong top-line performance in the first quarter of fiscal 2025, which saw 17% year-over-year growth. An innovative product portfolio and the growing demand for the Human Capital Management (HCM) and payroll solution sectors serve as key tailwinds.

Product Innovation Drives PYCR’s Growth

Paycor has enhanced its HCM platform by adding features that increase its per-employee-per-month (PEPM) opportunity. The introduction of the compensation management solution added $2 to the PEPM, bringing the total to $55. The company’s product roadmap continues to focus on connecting people, data and expertise.

Paycor recently launched Paycor Assistant — an AI-powered HR companion designed to enhance productivity and improve the employee experience. This automation leads to greater efficiency, reduces administrative overhead and enhances the employee experience by ensuring timely and accurate payroll processing.

The company launched Paycor Compensation Management — a collaborative solution designed to streamline compensation planning while enhancing employee engagement and retention. Paycor introduced a time management solution and Time-Off Management, a suite of innovative features aimed at transforming time-off management for the modern workforce.

The Paycor Integration Platform enables businesses and customers to effortlessly link their chosen solutions with Paycor’s HCM system. Featuring more than 320 pre-built connectors for leading technology partners, the platform simplifies the integration of payroll, HR and benefits systems with existing tools.

Expanding Clientele to Aid Paycor’s Performance

PYCR’s future performance depends on expanding its customer base, especially in the top 50 U.S. metropolitan areas. To achieve this, the company plans to increase its sales team and form partnerships with Embedded HCM providers.

However, there are risks associated with this expansion. One key concern is the recruitment and retention of qualified sales personnel, as finding and keeping skilled sales staff in a competitive labor market can be challenging.

Paycor’s success depends on its ability to offer products that meet the changing needs of customers. The effectiveness of its solutions and its ability to differentiate from competitors will play a crucial role in its success.

PYCR Gives Positive Outlook

For the second quarter of fiscal 2025, Paycor expects total revenues of $176-$178 million, suggesting 12% growth at the high end of the forecast.

The Zacks Consensus Estimate for revenues is pegged at $177.11 million, indicating 11.01% year-over-year growth.

The consensus mark for earnings has been unchanged in the past 30 days at 11 cents per share.

For fiscal 2025, Paycor anticipates revenues of $726-$733 million. The Zacks Consensus Estimate for revenues is pegged at $730.70 million, indicating year-over-year growth of 11.57%.

The consensus mark for earnings is pegged at 56 cents per share, which has risen 3 cents per share in the past 60 days, suggesting a year-over-year rise of 12%.

PYCR’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering an average earnings surprise of 18.61%.

Paycor’s Zacks Rank

PYCR currently has a Zacks Rank #2 (Buy), which implies that investors should start accumulating the stock right now.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.