Why NYSE:PAYC Is a Standout High-Growth Stock in a Consolidation Phase.

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.

Unpacking NYSE:PAYC's Growth Rating

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:PAYC, the assigned 8 reflects its growth potential:

• PAYC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.30%, which is quite impressive.
• Measured over the past years, PAYC shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.85% on average per year.
• The Revenue has grown by 23.15% 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 24.50% on average per year.
• PAYC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.85% yearly.
• The Revenue is expected to grow by 11.73% on average over the next years. This is quite good.

How do we evaluate the 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 3.59. This indicates that PAYC is financially healthy and has little risk of bankruptcy at the moment.
• PAYC has a Altman-Z score of 3.59. This is in the better half of the industry: PAYC outperforms 67.50% of its industry peers.
• There is no outstanding debt for PAYC. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and 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.

Profitability Examination for NYSE:PAYC

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:PAYC has earned a 8 out of 10:

• Looking at the Return On Assets, with a value of 8.12%, PAYC is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
• PAYC's Return On Equity of 26.15% is amongst the best of the industry. PAYC outperforms 83.75% of its industry peers.
• The Return On Invested Capital of PAYC (19.59%) is better than 86.25% of its industry peers.
• The Average Return On Invested Capital over the past 3 years for PAYC is significantly above the industry average of 12.24%.
• The 3 year average ROIC (17.49%) for PAYC is below the current ROIC(19.59%), indicating increased profibility in the last year.
• The Profit Margin of PAYC (20.12%) is better than 91.25% of its industry peers.
• PAYC has a Operating Margin of 26.65%. This is amongst the best in the industry. PAYC outperforms 91.25% of its industry peers.
• Looking at the Gross Margin, with a value of 83.69%, PAYC belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.

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 bad technical rating, but it does show a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 189.65. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 187.43, a Stop Loss order could be placed below this zone.

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

Check the latest full fundamental report of PAYC for a complete fundamental analysis.

Check the latest full technical report of PAYC for a complete technical analysis.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.