PCTY
PCTY
Recurring SaaS
★ Quality 65/100Price today
$135.84
what the market pays
Worth
$193.50
calculated cycle value
Price is 30% below its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Software and subscriptions
$189.33
per share
How it's calculated
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Recurring SaaS · vs 34 peers
You pay 18.4x times this business's cash flow; its sector median is 21.5x.
43% below what Charlie thinks it's worth (26.4x) — that gap is your safety margin.
Why does Charlie give it 26.4x?
The multiple is how many times its cash flow the business is worth.
An average business of its kind is worth 21.5x. This one rises from there:
69% margin. it charges almost pure toll; it can raise prices without losing customers.
Grows 28% a year. next year's cash flow will be larger than today's.
That's why it's worth 26.4x, more than the 21.5x average.
Why Undervalued?
Its free cash flow is $7.16/share × 26.4x multiplier plus $4.17 in net cash = $193.50 in intrinsic value. Today's price of $135.84 is 43% below that value — there's a real safety margin to enter.
The price is 30% below the calculated value. There's a real safety margin.
The model asks for a discount to absorb estimate errors. That cushion is here.
If the business disappoints a little, the price should hold near $154.80.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$154.80
-20% off Value
🟡 Discounted
≤$183.82
-5% off Value
🟢 Today
$135.84
+43% Valor
Undervalued
Today's price offers a real discount to the calculated value. For the long run, this is the kind of entry that builds wealth.
“Price is what you pay. Value is what you get.”
— Warren Buffett
Model updated · July 2026
The business
Paylocity es la nómina que se incrusta en la empresa y nadie se atreve a arrancar.
Paylocity vende software en la nube para pagar sueldos y gestionar recursos humanos a empresas medianas de EE.UU. Cobra suscripción mensual por empleado, más módulos de beneficios, contratación y capacitación. Suma un ingreso extra: los intereses sobre el dinero que retiene brevemente antes de pagar cada nómina.
El costo de cambiar es alto: mover la nómina de proveedor es como cambiar el cableado de un edificio en funcionamiento, nadie lo hace por gusto. Cada módulo adicional que el cliente adopta lo amarra más. No es un monopolio; ADP y Paychex compiten con músculo.
Revenue history
From $0.6B to $1.6B in 4 years — nearly 2.7x its size. Selling more and more is the base of everything else.
Where each $100 of sales goes
Revenue $1.6B · FY2025
Of every $100 in sales, $86 goes to costs and operations; $14 is left as net profit (14% margin).
Catalysts and risks
Venta cruzada de módulos: más productos por cliente elevan el ingreso por empleado.
Ingreso por intereses sobre fondos de clientes mientras las tasas sigan altas.
Avance hacia empresas medianas más grandes, ampliando el mercado direccionable.
Ingreso ligado al empleo: una recesión reduce nóminas y cobros por empleado.
Bajada de tasas recorta el ingreso por intereses sobre fondos retenidos.
Competencia feroz de ADP, Paychex y Paycom presiona precios.
Charlie's note
“Un negocio que crece 26% con 69% de margen bruto merece respeto, y a 26x flujo de caja lo pagas casi a su justo precio. No hay descuento por hacer cola: sin foso profundo, prefiero comprarlo cuando el mercado se distrae.”
Analysis · July 2026
So when would be a good price for PCTY?
Today it trades below what we calculate. If you want us to tell you when that changes —or when the value itself moves because the company reported— we will email you.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.