Exploring the Growth Potential of NYSE:PAYC as It Nears a Breakout.

In this article we will dive into PAYCOM SOFTWARE INC (NYSE:PAYC) as a possible candidate for growth investing. Investors should always do their own research, but we noticed PAYCOM SOFTWARE INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Growth Examination for NYSE:PAYC

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:PAYC scores a 8 out of 10:

• The Earnings Per Share has grown by an impressive 36.82% over the past year.
• Measured over the past years, PAYC shows a very strong growth in Earnings Per Share. The EPS has been growing by 36.29% on average per year.
• The Revenue has grown by 26.36% in the past year. This is a very strong growth!
• Measured over the past years, PAYC shows a very strong growth in Revenue. The Revenue has been growing by 26.00% on average per year.
• Based on estimates for the next years, PAYC will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.93% on average per year.
• Based on estimates for the next years, PAYC will show a quite strong growth in Revenue. The Revenue will grow by 14.61% on average per year.

ChartMill's Evaluation of Health

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:PAYC has achieved a 8 out of 10:

• An Altman-Z score of 4.37 indicates that PAYC is not in any danger for bankruptcy at the moment.
• With a decent Altman-Z score value of 4.37, PAYC is doing good in the industry, outperforming 75.95% of the companies in the same industry.
• PAYC has a debt to FCF ratio of 0.10. This is a very positive value and a sign of high solvency as it would only need 0.10 years to pay back of all of its debts.
• PAYC has a Debt to FCF ratio of 0.10. This is amongst the best in the industry. PAYC outperforms 82.28% of its industry peers.
• A Debt/Equity ratio of 0.02 indicates that PAYC is not too dependend on debt financing.
• Looking at the Debt to Equity ratio, with a value of 0.02, PAYC is in the better half of the industry, outperforming 70.89% 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.

A Closer Look at Profitability for NYSE:PAYC

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:PAYC was assigned a score of 8 for profitability:

• The Return On Assets of PAYC (8.79%) is better than 82.28% of its industry peers.
• The Return On Equity of PAYC (23.85%) is better than 81.01% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 18.76%, PAYC belongs to the top of the industry, outperforming 84.81% 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 12.10%.
• The 3 year average ROIC (16.48%) for PAYC is below the current ROIC(18.76%), indicating increased profibility in the last year.
• PAYC's Profit Margin of 20.80% is amongst the best of the industry. PAYC outperforms 92.41% of its industry peers.
• PAYC's Operating Margin of 27.64% is amongst the best of the industry. PAYC outperforms 92.41% of its industry peers.
• PAYC has a better Gross Margin (84.01%) than 93.67% of its industry peers.

How do we evaluate the setup for NYSE:PAYC?

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. NYSE:PAYC currently holds a 8 as its setup rating, suggesting a particular level of consolidation in the stock.

PAYC has a bad technical rating, but it does show a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a support zone below the current price at 194.36, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

More Strong Growth stocks can be found in our Strong Growth screener.

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

Our latest full technical report of PAYC contains the most current technical analsysis.

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.