Paylocity Holding (PCTY) reported Q2 2026 revenue of US$416.1 million and basic EPS of US$0.93, alongside net income excluding extra items of US$50.2 million. Over the trailing twelve months, the company recorded total revenue of US$1.7 billion and basic EPS of US$4.33. Quarterly revenue has ranged from US$362.9 million in Q1 2025 to US$454.5 million in Q3 2025, with EPS moving between US$0.67 and US$1.64 over the same period, giving investors a view of how earnings power has tracked alongside top line expansion. With a trailing net profit margin of 14.2% and earnings growth context already in focus, this latest update highlights how durable those margins may be from here.

See our full analysis for Paylocity Holding.

With the headline numbers on the table, the next step is to see how this earnings report aligns with the widely followed views on Paylocity’s growth, quality and risks, and to assess where the new data challenges or supports those narratives.

TTM EPS Above Quarterly Run Rate

• Over the last twelve months, basic EPS sits at US$4.33, compared with quarterly EPS figures in the recent stretch that have mostly been below US$1.00 aside from Q3 2025 at US$1.64.
• What stands out for a bullish take is that this higher TTM EPS aligns with five year earnings growth of 27.6% per year, yet the most recent year showed 7.7% growth. This means:
  • The longer run record of expanding earnings supports those who see the business as having durable earnings power, even though the latest year grew at a slower pace than the five year average.
  • This contrast between the stronger multi year trend and the more moderate recent year gives you a concrete way to judge how much weight to put on the optimistic growth story.

Over the past year, Paylocity’s earnings track record and the current TTM EPS give bulls plenty to point to, but the slower 7.7% recent growth invites a closer look at how the story is evolving compared with the prior five years. 📊 Read the full Paylocity Holding Consensus Narrative.

Margins Hold At Around 14%

• Trailing net profit margin is 14.2%, slightly below last year’s 14.8%, alongside TTM net income of about US$238.3 million on TTM revenue of roughly US$1.7b.
• Bears often focus on profitability soft spots, and the modest move from 14.8% to 14.2% supports that caution while still showing solid absolute margins, because:
  • The 7.7% earnings growth over the last year is below the 27.6% per year five year pace, which fits the more cautious view that recent profitability momentum is not matching the earlier stretch.
  • At the same time, a margin in the mid teens combined with TTM revenue above US$1.6b suggests the business is still generating meaningful profit, so the bearish angle is more about a slower clip than about profitability disappearing.

Premium 26.9x P/E With Stated DCF Gap

• Paylocity trades on a trailing P/E of 26.9x, above the US Professional Services industry at 21.5x and its peer average of 15.7x, while the current share price of US$117.85 sits 52.6% below the stated DCF fair value of US$248.62.
• This mix of a higher P/E and a large DCF gap creates a clear tension for both bullish and bearish views, because:
  • Supporters can point to the 15.3% expected annual earnings growth and the DCF fair value being well above the current price as reasons the premium multiple might be acceptable.
  • Critics can point out that the stock trades richer than industry and peer P/E averages while forecast revenue growth of 8.1% and earnings growth of 15.3% are only slightly below broad US market forecasts, which may not justify paying that kind of premium in their view.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Paylocity Holding's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Paylocity’s slower 7.7% recent earnings growth, slight margin softening around 14% and premium 26.9x P/E suggest you may want alternatives with a more attractive valuation profile.

If that mix of slower momentum and a richer multiple feels tight, you can quickly scan 53 high quality undervalued stocks to spot companies where current pricing looks more favourable against their fundamentals.

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.