10 Best Upside Stocks to Buy According to Hedge Funds

8. Paylocity Holding Corporation (NASDAQ:PCTY)

Average Upside Potential: 47.55%

Number of Hedge Fund Holders: 44

Paylocity Holding Corporation (NASDAQ:PCTY) is one of the best upside stocks to buy according to hedge funds. On May 7, Paylocity reported strong FQ3 2026 results, with total revenue reaching $502.3 million, a 10.5% increase year-over-year. Recurring revenue grew 11.6% to $469.9 million, while GAAP net income rose to $111.3 million. Driven by these solid financials and consistent cash flow generation, the company raised its full-year guidance for both revenue and profitability.

The company is actively scaling its AI-driven HCM, Finance, and IT solutions, highlighted by the April 2026 acquisition of Grayscale Labs to support its recruiting automation capabilities. Paylocity also continues to prioritize shareholder returns, repurchasing $350 million in shares during the first nine months of the fiscal year and authorizing an additional $1 billion for future share repurchases.

Looking ahead, Paylocity projects steady growth for the remainder of fiscal year 2026, with total annual revenue expected to reach up to $1.76 billion. The company’s continued investment in R&D and strategic acquisitions remains central to its long-term strategy, ensuring its platform remains competitive by leveraging core employee data and expanded AI functionality.

Paylocity Holding Corporation (NASDAQ:PCTY) is a US provider of cloud‑based payroll and human capital management/HCM software, offering unified HR, payroll, talent, time, benefits, and spend management solutions to help mid‑market organizations streamline workforce operations.