Paycor Earnings: Solid Momentum and Further Profitability Upside Despite Slowing Labor Growth

We maintain our $26 fair value estimate for no-moat Paycor following sound second-quarter fiscal 2024 results that fell marginally short of our above-guidance top-line forecasts but once again exceeded our profitability expectations. Following the release, we made minor adjustments to our near-term assumptions that are offset by time value of money. While Paycor shares continue to screen as undervalued, we see better opportunities among our moatier payroll and HCM coverage.