PCTY
Paylocity Holding Corporation
$113.02
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 24.5% below fair value
You pay
$113.02
Bear
$94.22
Fair
$149.68
Bull
$212.78
Bear
$94.22
-16.6%
10% stage 1 growth, 11% discount
Fair
$149.68
+32.4%
16% stage 1 growth, 11% discount
Bull
$212.78
+88.3%
21% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
43%
Implied Market Multiple
24.9x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $147.09 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $149.68 per share.
Warnings
Stock-based employee pay equals 63% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions