Stephens Starts Paycor HCM Inc (PYCR) at Overweight

Stephens analyst Charles Nabhan initiates coverage on Paycor HCM Inc (NASDAQ: PYCR) with a Overweight rating and a price target of $18.00.

The analyst comments "We are initiating coverage of PYCR with an Overweight/Vol rating and $18 price target. Our constructive view is based on: 1) The near-term positioning of the business, achievability of the FY'25 guide, and levers to navigate a challenging macro backdrop, 2) The long-term positioning of the company as a share-gainer in the SMB/middle-market payroll/HCM software industry, which should facilitate the scaling and FCF generation. While the impact of a COVID-driven pull-forward in demand is a topic of debate, we believe demand remains resilient. From a valuation standpoint, shares trade at a discount to historical EV/Sales (3x vs 6.5x), given macro challenges, and at a discount of 2.5x (vs. 1x historically) to the peer group (5.5x), given the relative scale of the platform. We see progress against FY'25 targets as a catalyst for multiple expansion and note that the valuation gap vs. peers has widened in recent qtrs, creating a favorable entry point."

For an analyst ratings summary and ratings history on Paycor HCM Inc click here. For more ratings news on Paycor HCM Inc click here.

Shares of Paycor HCM Inc closed at $13.39 yesterday.

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