Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Asure Software (NASDAQ:ASUR) and its peers.
Modern HR software has two powerful benefits: cost savings and ease of use. For cost savings, businesses large and small much prefer the flexibility of cloud-based, web-browser-delivered software paid for on a subscription basis rather than the hassle and complexity of purchasing and managing on-premise enterprise software. On the usability side, the consumerization of business software creates seamless experiences whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy-to-use platform.
The 5 HR software stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was in line.
While some HR software stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.1% since the latest earnings results.
Asure Software (NASDAQ:ASUR)
Operating in the often-overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ:ASUR) provides cloud-based human capital management software and services that help small and medium-sized businesses manage payroll, taxes, time tracking, and HR compliance.
Asure Software reported revenues of $36.25 million, up 23.7% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ billings estimates but full-year revenue guidance missing analysts’ expectations significantly.
Asure Software pulled off the fastest revenue growth but had the weakest full-year guidance update of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $8.20.
Is now the time to buy Asure Software? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Paylocity (NASDAQ:PCTY)
Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ:PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes.
Paylocity reported revenues of $408.2 million, up 12.5% year on year, outperforming analysts’ expectations by 1.9%. The business had a strong quarter with a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
Paylocity scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6% since reporting. It currently trades at $147.98.
Is now the time to buy Paylocity? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Dayforce (NYSE:DAY)
Rebranded from Ceridian in January 2024 to highlight its flagship product, Dayforce (NYSE:DAY) provides cloud-based software that helps organizations manage their entire employee lifecycle, including HR, payroll, workforce management, benefits, and talent development.
Dayforce reported revenues of $481.6 million, up 9.5% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a miss of analysts’ billings estimates.
Dayforce delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $68.99.
Read our full analysis of Dayforce’s results here.
Paycom (NYSE:PAYC)
Pioneering the concept of employees doing their own payroll with its "Beti" technology, Paycom (NYSE:PAYC) provides cloud-based human capital management software that helps businesses manage the entire employment lifecycle from recruitment to retirement.
Paycom reported revenues of $493.3 million, up 9.2% year on year. This print was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged a narrow beat of analysts’ EBITDA estimates but billings in line with analysts’ estimates.
Paycom delivered the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 8.9% since reporting and currently trades at $167.33.
Read our full, actionable report on Paycom here, it’s free for active Edge members.
Paychex (NASDAQ:PAYX)
Once known as the go-to service for small business payroll needs, Paychex (NASDAQ:PAYX) provides payroll processing, HR services, employee benefits administration, and insurance solutions to small and medium-sized businesses.
Paychex reported revenues of $1.54 billion, up 16.8% year on year. This result met analysts’ expectations. However, it was a slower quarter as it logged a slight miss of analysts’ EBITDA estimates.
The stock is down 14% since reporting and currently trades at $110.52.
Read our full, actionable report on Paychex here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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