Paycor HCM Inc (PYCR) PT Raised to $21 at Goldman Sachs

Goldman Sachs analyst Gabriela Borges raised the price target on Paycor HCM Inc (NASDAQ: PYCR) to $21.00 (from $19.00) while maintaining a Neutral rating.

The analyst comments "Paycor hosted its first Investor Day as a public company on 11/21 in NYC. Paycor outlined its progress on achieving its 2021 IPO goals and presented new targets for the next 3-5 years. With respect to market opportunity, Paycor's TAM has increased from $29bn at the time of IPO to $47bn today driven 90%+ by product investments, and management expressed optimism around winning market share in a software subsector that is still dominated by legacy vendors in the mid market. Paycor introduced mid-term financial targets with a 3-5 year timeframe, targeting recurring revenue growth of 15%+, adjusted operating income margins of 25%, and FCF margins of 20%+. Taken together, Paycor is targeting a Rule of 35 profile by FY29, with a longer-term goal of Rule of 40. We are incrementally positive on the stock as we believe Paycor is taking steps to improve its go to market after several quarters of mixed performance, the potential for the Embedded HCM pipeline to drive upside to estimates, and the stock trading at <3/5x EV/sales (2026E), a ~45% discount to peers with growth in the 10-20% range. We increase our 12-month price target to $21 from $19 given improved visibility into margin expansion."

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