PCTY
Paylocity Holding Corporation
$148.02
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 3.0% below fair value
You pay
$148.02
Bear
$116.64
Fair
$152.53
Bull
$187.09
Bear
$116.64
-21.2%
6% stage 1 growth, 11% discount
Fair
$152.53
+3.0%
9% stage 1 growth, 11% discount
Bull
$187.09
+26.4%
12% stage 1 growth, 11% discount
Adjust Assumptions
9.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
19.8x
Market is pricing in (growth)
8.8%
vs 9.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (41 analysts)
$162.56
Divergence from AlphaVal
6%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $152.53 per share.
Warnings
Stock-based employee pay equals 51% 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