Paylocity Holding Corporation (NASDAQ:PCTY) just released its latest third-quarter results and things are looking bullish. Paylocity Holding beat earnings, with revenues hitting US$502m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the most recent consensus for Paylocity Holding from 20 analysts is for revenues of US$1.89b in 2027. If met, it would imply a decent 9.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 20% to US$5.77. In the lead-up to this report, the analysts had been modelling revenues of US$1.88b and earnings per share (EPS) of US$5.23 in 2027. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results.

The consensus price target fell 6.4% to US$154, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Paylocity Holding at US$250 per share, while the most bearish prices it at US$115. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Paylocity Holding's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Paylocity Holding's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 7.4% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.7% annually. So it's pretty clear that, while Paylocity Holding's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Paylocity Holding's earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Paylocity Holding. Long-term earnings power is much more important than next year's profits. We have forecasts for Paylocity Holding going out to 2028, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.