Overview
We maintain our overweight rating on Paylocity (PCTY), which has maintained its resilient outperformance as of Q3 despite the pandemic. The share price has appreciated by +43% since our first coverage last October, where we discussed Paylocity's solid market positioning despite the fierce competition in the HCM (Human Capital Management) and Payroll space. We expect Paylocity to continue leveraging its strong positioning to deliver market share gains in core HCM and Payroll, and growth within the LMS (Learning Management System) business. We also believe that HCM/Payroll and LMS make a perfect combination