NYSE:PAYC qualifies as a high growth stock and is consolidating.

Last update: Dec 25, 2023

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether PAYCOM SOFTWARE INC (NYSE:PAYC) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but PAYCOM SOFTWARE INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

Growth Assessment of NYSE:PAYC

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:PAYC was assigned a score of 8 for growth:

The Earnings Per Share has grown by an impressive 36.82% over the past year.
PAYC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 36.29% yearly.
PAYC shows a strong growth in Revenue. In the last year, the Revenue has grown by 26.36%.
The Revenue has been growing by 26.00% on average over the past years. This is a very strong growth!
PAYC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.93% yearly.
The Revenue is expected to grow by 14.21% on average over the next years. This is quite good.

How We Gauge Health for NYSE:PAYC

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:PAYC has earned a 8 out of 10:

PAYC has an Altman-Z score of 4.53. This indicates that PAYC is financially healthy and has little risk of bankruptcy at the moment.
PAYC has a better Altman-Z score (4.53) than 80.00% of its industry peers.
The Debt to FCF ratio of PAYC is 0.10, which is an excellent value as it means it would take PAYC, only 0.10 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.10, PAYC belongs to the top of the industry, outperforming 82.50% of the companies in the same industry.
PAYC has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.02, PAYC is doing good in the industry, outperforming 70.00% of the companies in the same industry.
The current and quick ratio evaluation for PAYC is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

What does the Profitability looks like for NYSE:PAYC

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:PAYC, the assigned 8 is a significant indicator of profitability:

The Return On Assets of PAYC (8.79%) is better than 81.25% of its industry peers.
With an excellent Return On Equity value of 23.85%, PAYC belongs to the best of the industry, outperforming 82.50% of the companies in the same industry.
With an excellent Return On Invested Capital value of 18.76%, PAYC belongs to the best of the industry, outperforming 83.75% of the companies in the same industry.
PAYC had an Average Return On Invested Capital over the past 3 years of 16.48%. This is above the industry average of 12.03%.
The 3 year average ROIC (16.48%) for PAYC is below the current ROIC(18.76%), indicating increased profibility in the last year.
PAYC has a better Profit Margin (20.80%) than 92.50% of its industry peers.
The Operating Margin of PAYC (27.64%) is better than 92.50% of its industry peers.
PAYC has a Gross Margin of 84.01%. This is amongst the best in the industry. PAYC outperforms 93.75% of its industry peers.

Why is NYSE:PAYC a setup?

Alongside the Technical Rating, ChartMill assigns a Setup Rating to evaluate the consolidation level of a stock. This rating, ranging from 0 to 10, is updated daily and considers various short-term technical indicators. The current setup rating for NYSE:PAYC is 7:

PAYC has a poor technical rating and the quality of the setup is also not perfect at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of PAYC

For an up to date full technical analysis you can check the technical report of PAYC

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.