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1. Company Snapshot

1.a. Company Description

Paycor HCM, Inc.provides software-as-a-service (SaaS) human capital management (HCM) solutions for small and medium-sized businesses (SMBs) primarily in the United States.It offers cloud-native platform to address the comprehensive people management needs of SMB leaders.


The company's SaaS based people management products include Core HCM and Payroll, a calculation engine that enables real-time changes in payroll processing; Workforce Management, a solution with flexible time entry, overtime calculations, and scheduling capabilities with real-time payroll synchronization; Benefits Administration, a decision support solution to help leaders to streamline and optimize company's benefits administration; Talent Management, an integrated compensation and performance management solution; and Employee Engagement, a solution with interactive learning tools and AI-powered surveys.It serves manufacturing, healthcare, restaurant, retail, professional services, nonprofit, and education industries through its direct sales teams.The company was founded in 1990 and is headquartered in Cincinnati, Ohio.

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1.b. Last Insights on PYCR

Paycor HCM, Inc.'s recent performance is driven by strong earnings growth potential, optimistic mid-term guidance, and successful upmarket traction. The company's new guidance indicates sustainable mid-teens recurring revenue growth and >800 bps adj EBIT margin expansion, driving >20% adj EBIT growth. Additionally, Paycor's strong broker relationships and increased sales headcount are key drivers of its positive outlook. The company's recent Q1 earnings and revenue beat, with earnings of $0.10 per share, beating estimates, also contributed to its positive performance.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Paychex Earnings Preview: Paycor Adds Fuel, But Valuation Stays High

Jun -20

Source: seekingalpha.com

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Paychex Keeps Paying Dividends, And Will Grow Bigger After Paycor Buyout

Jun -08

Source: seekingalpha.com

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Paychex Completes Acquisition of Paycor

Apr -14

Source: businesswire.com

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STNE or PYCR: Which Is the Better Value Stock Right Now?

Mar -26

Source: zacks.com

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Paycor HCM, Inc. (PYCR) Beats Q2 Earnings and Revenue Estimates

Feb -05

Source: zacks.com

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Paycor Announces Second Quarter Fiscal Year 2025 Financial Results

Feb -05

Source: globenewswire.com

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Paycor Set to Report Q2 Earnings: What's in Store for the Stock?

Feb -03

Source: zacks.com

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Advanced Human Capital Management (HCM) Solution Now Available to Convenience Retail and Wholesale Petroleum Operators as PDI Technologies Announces Entry into Embedded Partner Program with Paycor

Jan -22

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.42%)

6. Segments

Recurring and Other

Expected Growth: 10.55%

Recurring revenue growth of 10.55% in Paycor HCM, Inc. is driven by increasing adoption of human capital management (HCM) solutions, expansion of existing customer relationships, and rising demand for cloud-based payroll and HR services. Other revenue growth is fueled by implementation services, data analytics, and advisory offerings, which complement the company's core HCM platform.

Interest Income on Funds Held for Clients

Expected Growth: 8.5%

The 8.5% growth in Interest Income on Funds Held for Clients from Paycor HCM, Inc. is driven by increased adoption of payroll processing services, expansion of client base, and rising interest rates. Additionally, the company's strategic partnerships and investments in digital platforms have improved operational efficiency, leading to higher interest income.

7. Detailed Products

Payroll

A comprehensive payroll processing solution that automates payroll calculations, tax compliance, and benefits administration.

Time and Attendance

A time-tracking and attendance management system that helps to monitor employee work hours, track time-off requests, and automate labor law compliance.

Human Capital Management (HCM)

A comprehensive HCM platform that integrates payroll, time and attendance, benefits administration, and talent management to provide a single source of truth for HR data.

Recruiting and Onboarding

A recruitment and onboarding solution that streamlines the hiring process, from job posting to new hire orientation.

Performance Management

A performance management system that helps to set goals, track progress, and provide continuous feedback to employees.

Benefits Administration

A benefits administration solution that helps to manage employee benefits, including health insurance, retirement plans, and other benefits.

Reporting and Analytics

A reporting and analytics platform that provides real-time insights into HR data, including payroll, time and attendance, and benefits administration.

8. Paycor HCM, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Paycor HCM, Inc. operates in a highly competitive market, but its strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Paycor HCM, Inc.'s customers are largely small to medium-sized businesses, which have limited bargaining power due to their smaller size and lack of negotiating leverage.

Bargaining Power Of Suppliers

Paycor HCM, Inc. has a diversified supplier base, which reduces its dependence on any single supplier, thereby limiting the bargaining power of suppliers.

Threat Of New Entrants

The human capital management (HCM) industry is highly competitive, and new entrants can easily disrupt the market with innovative solutions, posing a significant threat to Paycor HCM, Inc.'s market share.

Intensity Of Rivalry

The HCM industry is highly competitive, with many established players, including ADP, Workday, and BambooHR, which intensifies the rivalry and competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.19%
Debt Cost 6.62%
Equity Weight 93.81%
Equity Cost 6.62%
WACC 6.62%
Leverage 6.60%

11. Quality Control: Paycor HCM, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CoreCard

A-Score: 5.1/10

Value: 3.7

Growth: 5.7

Quality: 7.4

Yield: 0.0

Momentum: 10.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Paycor HCM

A-Score: 5.0/10

Value: 2.8

Growth: 7.7

Quality: 5.2

Yield: 0.0

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Rimini Street

A-Score: 4.7/10

Value: 7.9

Growth: 2.4

Quality: 6.0

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
SoundHound AI

A-Score: 4.0/10

Value: 6.0

Growth: 4.3

Quality: 3.9

Yield: 0.0

Momentum: 9.5

Volatility: 0.3

1-Year Total Return ->

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Stock-Card
NextPlat

A-Score: 3.7/10

Value: 9.2

Growth: 5.6

Quality: 4.2

Yield: 0.0

Momentum: 2.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Getaround

A-Score: 3.4/10

Value: 10.0

Growth: 5.0

Quality: 5.4

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.49$

Current Price

22.49$

Potential

-0.00%

Expected Cash-Flows