Technology
Quality, growth, and a small macro tailwind - PAYC is well placed to beat street estimates. The company is effectively filling a gap in the mid-market for an integrated solution of Payroll and HCM products. This gives it a sustainable high growth rate for many years. Its proven profitability model is a key differentiator among other high growth SaaS companies. Meanwhile, low unemployment means it is even more important for employers to offer benefits to retain employees. These packages need additional HR modules providing upsell opportunities. Rising rates is also a tailwind for earnings due to interest on float at ~100% incremental margin. TP $390 (45% upside).
Edition: 135
- 13 May, 2022