Jul. 28 at 8:46 PM
Citi said sentiment toward HR software stocks has improved in recent months as short interest declines and sector fundamentals stabilize. Among the group, the firm identified Paylocity as its top pick heading into earnings season.
Citi reiterated its Buy rating on Paylocity, pointing to stronger web-traffic trends than peers, improving business momentum, and multiple growth drivers. Analysts are particularly focused on how the company's recent AI investments could influence fiscal 2027 growth and profitability. The firm also believes investor expectations have reset to more reasonable levels, creating a favorable setup ahead of earnings.
In contrast, Citi remains more cautious on Paycom due to ongoing execution concerns. Overall, the bank sees Paylocity as better positioned to sustain revenue growth and benefit from improving sentiment across the HR software sector.
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