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ADP vs PCTY
Which Stock Would AI Choose? Automatic Data Processing (ADP) vs. Paylocity Holding (PCTY) Stock Comparison
Key Takeaways
- ADP is a large-cap payroll and human capital management (HCM) leader with a highly durable client base, while PCTY is a faster-growing, mid-market-focused HCM and finance software provider.
- ADP's scale, client retention near 92%, and rising client-funds interest income support stability; PCTY offers stronger recurring-revenue growth (roughly 11–12%) but trades at a richer valuation multiple.
- Both companies are aggressively embedding artificial intelligence (AI) into their platforms, making AI monetization a shared catalyst and competitive risk.
- Recent momentum favors PCTY over the trailing 90 days, though ADP has delivered steadier, multi-year shareholder returns and a growing dividend.
- The comparison highlights a classic trade-off between size, stability, and income (ADP) versus growth and margin expansion potential (PCTY).
Introduction
Investors evaluating the human capital management (HCM) software sector frequently weigh established scale against growth potential, and few pairings illustrate that trade-off as cleanly as ADP and PCTY. ADP (Automatic Data Processing) is a decades-old payroll and HR outsourcing giant, while PCTY (Paylocity Holding) is a cloud-native challenger serving the mid-market. Both compete for the same employer dollars yet occupy distinct positions in market capitalization, revenue trajectory, and risk profile. For traders and long-term investors alike, this stock comparison offers a useful lens on relative performance, market positioning, and how AI is reshaping the industry's economics.
ADP Overview and Recent Performance
ADP provides cloud-based HCM, payroll, tax, benefits, and compliance services to more than 1.1 million clients worldwide. Its scale and stickiness are core advantages: Employer Services client retention stood at 92.1% for fiscal 2026, and the company ended the year with Employer Services business bookings up 6% to roughly $2.2 billion. In its most recent quarter, revenue rose 7% year over year to approximately $5.47 billion, while adjusted earnings per share climbed 17%, supported by higher client-funds interest income and operating productivity.
Recent market activity has reflected a mix of constructive fundamentals and near-term caution. Shares rose strongly in the months after an AI-driven earnings beat and a larger buyback plan, but have cooled in recent weeks as investors weighed slowing U.S. payroll growth and a valuation premium relative to peers. The company has highlighted its AI tools — notably "ADP Assist" agents and the "Zone" service platform — as drivers of efficiency and retention, while Lyric HCM adoption has grown sharply. ADP also remains a reliable dividend payer with a long history of consecutive annual increases.
PCTY Overview and Recent Performance
PCTY, Paylocity Holding, delivers a unified cloud platform spanning HCM, finance, and IT software, serving roughly 40,000 clients concentrated in the mid-market. The company's growth has outpaced ADP's, with total revenue up 11% year over year to about $444.7 million in its most recent quarter and non-GAAP earnings per share up nearly 18%. Recurring and other revenues — over 90% of the total — grew at a low-teens rate, and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margins have expanded through operational leverage and automation.
PCTY's recent stock behavior has been volatile but upward-trending over the trailing three months, aided by a high-profile New York Jets partnership, a $1 billion increase to its buyback program, and steady guidance raises through fiscal 2026. The company has pushed an AI-first strategy, acquiring Grayscale Labs for AI-powered recruiting and launching "Elevate" managed payroll and HR services. Still, multi-year shareholder returns remain negative, and the stock carries a forward earnings multiple well above sector norms, meaning sentiment hinges on continued execution and successful monetization of premium AI features.
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Head-to-Head Comparison
The two companies diverge sharply on scale and business model. ADP generates significant revenue from interest on client-held funds, giving it an additional earnings lever tied to interest rates — a source of income that is largely absent at a smaller scale for PCTY. Conversely, PCTY's subscription-heavy model produces faster organic growth and expanding margins, while ADP's growth is steadier and more tied to employment cycles.
On momentum, PCTY has shown stronger recent relative performance, but it also carries greater valuation risk, with a price-to-earnings ratio meaningfully above both the sector and its own fair-value estimates. ADP offers lower beta exposure, a dividend, and higher retention, but faces questions about whether its premium valuation can be sustained if hiring slows. Sector exposure is similar — both are sensitive to U.S. labor-market strength — yet their risk profiles differ: ADP's risk centers on cyclical payroll trends, while PCTY's centers on execution and the pace of AI monetization.
Tickeron AI Verdict
Based on observable factors such as trend consistency, stability, and catalysts, Tickeron's AI would likely lean toward ADP for its steadier price trend, durable client retention, diversified income streams, and shareholder-friendly capital returns. PCTY offers a more compelling growth profile and recent momentum, but its higher multiple and longer-dated negative multi-year returns introduce greater variability. The assessment is probabilistic rather than definitive: the AI's preference could shift as new earnings data, labor-market readings, and AI adoption metrics emerge.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is ADP is a Buy and PCTY is a StrongBuy.
ADP in upward trend: price rose above 50-day moving average on October 08, 2026
ADP moved above its 50-day moving average on October 08, 2026 date and that indicates a change from a downward trend to an upward trend. In 25 of 45 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 56%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 07, 2026. You may want to consider a long position or call options on ADP as a result. In 42 of 89 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 47%.
The Moving Average Convergence Divergence (MACD) for ADP just turned positive on October 08, 2026. Looking at past instances where ADP's MACD turned positive, the stock continued to rise in 26 of 50 cases over the following month. The odds of a continued upward trend are 52%.
The 10-day moving average for ADP crossed bullishly above the 50-day moving average on October 16, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 8 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 53%.
Following a +5.19% 3-day Advance, the price is estimated to grow further. Considering data from situations where ADP advanced for three days, in 159 of 317 cases, the price rose further within the following month. The odds of a continued upward trend are 50%.
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 9 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ADP declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 47%.
ADP broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for ADP entered a downward trend on October 13, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 10 (best 1 - 100 worst), indicating outstanding price growth. ADP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 17 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 41 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 46 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock slightly better than average.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 87 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (20.232) is normal, around the industry mean (-1.734). P/E Ratio (28.071) is within average values for comparable stocks, (15.183). Projected Growth (PEG Ratio) (2.446) is also within normal values, averaging (2.824). Dividend Yield (0.022) settles around the average of (0.074) among similar stocks. P/S Ratio (5.020) is also within normal values, averaging (71.128).
PCTY's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for PCTY turned positive on October 05, 2026. Looking at past instances where PCTY's MACD turned positive, the stock continued to rise in 31 of 40 cases over the following month. The odds of a continued upward trend are 77%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 01, 2026. You may want to consider a long position or call options on PCTY as a result. In 54 of 84 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 64%.
PCTY moved above its 50-day moving average on October 07, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for PCTY crossed bullishly above the 50-day moving average on October 13, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 10 of 17 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 59%.
Following a +4.54% 3-day Advance, the price is estimated to grow further. Considering data from situations where PCTY advanced for three days, in 174 of 277 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 11 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PCTY declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 72%.
PCTY broke above its upper Bollinger Band on October 15, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for PCTY entered a downward trend on October 08, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 36 (best 1 - 100 worst), indicating steady price growth. PCTY’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 44 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 48 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 81 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (7.718) is normal, around the industry mean (-1.734). P/E Ratio (35.605) is within average values for comparable stocks, (15.183). Projected Growth (PEG Ratio) (1.153) is also within normal values, averaging (2.824). Dividend Yield (0.000) settles around the average of (0.074) among similar stocks. P/S Ratio (4.558) is also within normal values, averaging (71.128).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PCTY’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock worse than average.
ADP | PCTY | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 42 | 36 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 87 Overvalued | 81 Overvalued | |
PROFIT vs RISK RATING 1..100 | 46 | 100 | |
SMR RATING 1..100 | 17 | 44 | |
PRICE GROWTH RATING 1..100 | 10 | 36 | |
P/E GROWTH RATING 1..100 | 41 | 48 | |
SEASONALITY SCORE 1..100 | 50 | 19 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
PCTY's Valuation (81) in the Packaged Software industry is in the same range as ADP (87) in the Data Processing Services industry. This means that PCTY’s stock grew similarly to ADP’s over the last 12 months.
ADP's Profit vs Risk Rating (46) in the Data Processing Services industry is somewhat better than the same rating for PCTY (100) in the Packaged Software industry. This means that ADP’s stock grew somewhat faster than PCTY’s over the last 12 months.
ADP's SMR Rating (17) in the Data Processing Services industry is in the same range as PCTY (44) in the Packaged Software industry. This means that ADP’s stock grew similarly to PCTY’s over the last 12 months.
ADP's Price Growth Rating (10) in the Data Processing Services industry is in the same range as PCTY (36) in the Packaged Software industry. This means that ADP’s stock grew similarly to PCTY’s over the last 12 months.
ADP's P/E Growth Rating (41) in the Data Processing Services industry is in the same range as PCTY (48) in the Packaged Software industry. This means that ADP’s stock grew similarly to PCTY’s over the last 12 months.
| ADP | PCTY | |
|---|---|---|
| RSI ODDS (%) | 1 day ago 38% | 1 day ago 78% |
| Stochastic ODDS (%) | 1 day ago 41% | 1 day ago 83% |
| Momentum ODDS (%) | 1 day ago 47% | 1 day ago 64% |
| MACD ODDS (%) | 1 day ago 52% | 1 day ago 77% |
| TrendWeek ODDS (%) | 1 day ago 54% | 1 day ago 65% |
| TrendMonth ODDS (%) | 1 day ago 56% | 1 day ago 64% |
| Advances ODDS (%) | 1 day ago 50% | 7 days ago 63% |
| Declines ODDS (%) | 29 days ago 47% | 24 days ago 72% |
| BollingerBands ODDS (%) | 1 day ago 48% | 1 day ago 76% |
| Aroon ODDS (%) | 1 day ago 42% | 1 day ago 72% |
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
ADP’s FA Score shows that 2 FA rating(s) are green while PCTY’s FA Score has 0 green FA rating(s).
- ADP’s FA Score: 2 green, 3 red.
- PCTY’s FA Score: 0 green, 5 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ADP’s TA Score shows that 5 TA indicator(s) are bullish while PCTY’s TA Score has 5 bullish TA indicator(s).
- ADP’s TA Score: 5 bullish, 5 bearish.
- PCTY’s TA Score: 5 bullish, 5 bearish.
Price Growth
ADP (@Packaged Software) experienced а +5.06% price change this week, while PCTY (@Packaged Software) price change was +6.43% for the same time period.
The average weekly price growth across all stocks in the @Packaged Software industry was -0.43%. For the same industry, the average monthly price growth was -3.98%, and the average quarterly price growth was +4.31%.
Reported Earning Dates
ADP is expected to report earnings on Oct 28, 2026.
PCTY is expected to report earnings on Nov 05, 2026.
Industries' Descriptions
@Packaged Software (-0.43% weekly)Packaged software comprises multiple software programs bundled together and sold as a group. For example, Microsoft Office includes multiple applications such as Excel, Word, and PowerPoint. In some cases, buying a bundled product is cheaper than purchasing each item individually[s20] . Microsoft Corporation, Oracle Corp. and Adobe are some major American packaged software makers.
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PCTY and
Correlation & Price change
A.I.dvisor indicates that over the last year, PCTY has been closely correlated with ADP. These tickers have moved in lockstep 78% of the time. This A.I.-generated data suggests there is a high statistical probability that if PCTY jumps, then ADP could also see price increases.
| Ticker / NAME | Correlation To PCTY | 1D Price Change % | ||
|---|---|---|---|---|
| PCTY | 100% | +4.93% | ||
| ADP - PCTY | 78% Closely correlated | +4.56% | ||
| PAYX - PCTY | 74% Closely correlated | +5.61% | ||
| WDAY - PCTY | 70% Closely correlated | +3.46% | ||
| VERX - PCTY | 67% Closely correlated | +4.43% | ||
| MANH - PCTY | 67% Closely correlated | +2.69% | ||
More | ||||
| 1 Day | |||
|---|---|---|---|
| ETFs / NAME | Price $ | Chg $ | Chg % |
| PY | 59.06 | 0.70 | +1.19% |
| Principal Value ETF (PY) | |||
| LQD | 104.28 | 1.07 | +1.04% |
| iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) | |||
| AGGY | 42.04 | 0.36 | +0.86% |
| WisdomTree Yield Enhanced U.S. Aggregate Bond Fund (AGGY) | |||
| IBIJ | 24.82 | 0.20 | +0.81% |
| iShares iBonds Oct 2033 Term TIPS ETF (IBIJ) | |||
| IREG | 2.74 | -0.55 | -16.72% |
| Leverage Shares 2X Long IREN Daily ETF (IREG) | |||