Paycor HCM, Inc. (PYCR) DCF Valuation & Fundamental Primer
Paycor HCM, Inc. (PYCR) currently trades at $22.49 with an enterprise value of $2.06B. Our proprietary institutional model rates Paycor HCM, Inc. at 66/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of 37.2% vs. historical growth of 18.9% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of Paycor HCM, Inc. (PYCR) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Paycor HCM, Inc. (PYCR) 3-Scenario DCF Valuation Range
Stress-test PYCR's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $22.49).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $13.20 -41% | $14.01 -38% | $14.95 -34% | $16.06 -29% | $17.40 -23% |
| 9.3% | $11.89 -47% | $12.52 -44% | $13.26 -41% | $14.10 -37% | $15.10 -33% |
| 10.0% | $10.81 -52% | $11.32 -50% | $11.90 -47% | $12.56 -44% | $13.33 -41% |
| 10.8% | $9.91 -56% | $10.33 -54% | $10.80 -52% | $11.33 -50% | $11.93 -47% |
| 11.5% | $9.14 -59% | $9.49 -58% | $9.88 -56% | $10.31 -54% | $10.79 -52% |
Institutional Software Quality Scorecard (66/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Positive FCF but lower conversion efficiency due to capex or timing
Standard software SBC dilution; modest equity transfer to employees
Solid gross margins with potential for operating leverage at scale
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- Net cash positive: $97.5M balance sheet buffer
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into PYCR?
The current share price demands 37.2% 5-year CAGR (56.0% net of SBC & dilution)—a +18.3% acceleration over historical run-rate (18.9%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (10.0% of revenue) and annual share dilution (1.2%/yr). Accounting for both requires 56.0% 5-year revenue CAGR to justify $22.49/sh on a true per-share economic cash flow basis.
Paycor HCM, Inc. (PYCR) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $654.9M | $654.9M | $778.6M | $925.6M | $1.10B | $1.31B | $1.56B |
| Gross Profit | $431.7M | $431.7M | $513.3M | $610.2M | $725.4M | $862.3M | $1.03B |
| Operating Income (EBIT) | $-55.5M | $-55.5M | $-65.9M | $-78.4M | $-93.2M | $-110.8M | $-131.7M |
| Stock-Based Compensation (SBC) | $65.4M | $65.4M | $77.8M | $92.5M | $109.9M | $130.7M | $155.4M |
| Unlevered Free Cash Flow (FCF) | $77.7M | $77.7M | $92.3M | $109.8M | $130.5M | $155.1M | $184.4M |
| SBC-Adjusted True Cash Flow | $12.3M | $12.2M | $14.6M | $17.3M | $20.6M | $24.5M | $29.1M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -12.1 + 0.48 × (Rule of 40) · R² = 63%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Paycor HCM, Inc. | PYCR | $4.09B | $654.9M | 65.9% | 11.9% | 30.7% | 10.0% | 6.1× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 6.1× | $3.99B | $4.09B | $22.49 | 0.0% |
| -20% Multiple Compression | 4.9× | $3.19B | $3.29B | $18.10 | -20.0% |
| -35% Multiple Compression | 4.0× | $2.60B | $2.69B | $14.81 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $3.27B | $3.37B | $18.54 | -18.0% |
Frequently Asked Questions: Paycor HCM, Inc. (PYCR) Valuation
What is Paycor HCM, Inc. (PYCR)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Paycor HCM, Inc. (PYCR) has a Base Case implied value of $11.85 per share (with a Bear Case of $5.53 and a Bull Case of $20.51), compared to its current price of $22.49. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Paycor HCM, Inc. (PYCR)'s Rule of 40 score and Free Cash Flow margin?
Paycor HCM, Inc. achieves a Rule of 40 score of 30.7%, combining a 18.9% revenue growth run-rate with a 11.9% TTM free cash flow margin on $654.9M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into PYCR stock according to Reverse-DCF analysis?
At $22.49 per share (Enterprise Value of $3.99B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 37.2%, compared to Paycor HCM, Inc.'s historical CAGR of 18.9%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does Paycor HCM, Inc. compare to Software & Cloud Services software peers?
Paycor HCM, Inc. (PYCR) earns an institutional Software Quality Score of 66/100 (Grade B+ — Quality Software Operator). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Paycor HCM, Inc. (PYCR)'s valuation?
Paycor HCM, Inc. recorded $65.4M in TTM stock-based compensation (10.0% of revenue). When treating SBC as a cash-equivalent compensation expense, Paycor HCM, Inc.'s SBC-adjusted free cash flow yield is 0.3%, scoring 16/25 on our Shareholder Dilution Friction pillar.