PCTY Should I Buy
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Paylocity Holding Corp (PCTY) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has demonstrated solid financial growth and profitability, the technical indicators and trading sentiment suggest a bearish trend. Additionally, insider selling and lowered analyst price targets indicate caution. For now, holding off on buying is recommended until more favorable conditions emerge.
The technical indicators show a bearish trend. The MACD is negative and contracting, the RSI is neutral at 29.294, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below key pivot levels, with support at 103.409 and resistance at 114.107. Overall, the technicals suggest weakness in the stock.
The company reported strong financial performance in Q2 2026, with revenue up 10.39% YoY, net income up 33.98% YoY, and EPS up 39.39% YoY. Gross margin also improved to 67.8%. Analysts still maintain positive ratings, with several firms highlighting strong execution, profitability, and long-term growth potential.
Insider selling has increased significantly (up 8159.61% over the last month), indicating potential lack of confidence from insiders. Analyst price targets have been lowered across the board, reflecting concerns about decelerating growth and industry-wide challenges. Technical indicators are bearish, and no recent news or events provide a positive short-term catalyst.
In Q2 2026, Paylocity demonstrated strong financial growth. Revenue increased by 10.39% YoY to $416.13M, net income rose by 33.98% YoY to $50.2M, and EPS grew by 39.39% YoY to 0.92. Gross margin improved slightly to 67.8%, showcasing operational efficiency.
Analysts have lowered price targets significantly, with the average target now between $145 and $190. However, most analysts maintain Buy or Outperform ratings, citing strong execution, profitability, and long-term growth potential despite short-term challenges.
