Here is Why Paylocity (PCTY) is One of the Best Upside Stocks to Buy According to Hedge Funds

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.

Here is Why Paylocity (PCTY) is One of the Best Upside Stocks to Buy According to Hedge Funds

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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.

While we acknowledge the risk and potential of PCTY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PCTY and that has 10,000% upside potential, check out our report about the cheapest AI stock.

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