Why NYSE:PAYC Is a Promising High-Growth Stock in the Midst of Consolidation.

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 Insights: NYSE:PAYC

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:

• The Earnings Per Share has grown by an nice 17.71% over the past year.
• The Earnings Per Share has been growing by 23.85% on average over the past years. This is a very strong growth
• Looking at the last year, PAYC shows a quite strong growth in Revenue. The Revenue has grown by 18.23% in the last year.
• The Revenue has been growing by 24.50% 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 12.10% yearly.
• The Revenue is expected to grow by 11.79% on average over the next years. This is quite good.

Health Examination for NYSE:PAYC

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:PAYC scores a 8 out of 10:

• 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.
• PAYC does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Looking at the Profitability

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 (9.90%) is better than 85.19% of its industry peers.
• PAYC has a Return On Equity of 32.59%. This is amongst the best in the industry. PAYC outperforms 85.19% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 23.25%, PAYC belongs to the top of the industry, outperforming 91.36% of the companies in the same industry.
• Measured over the past 3 years, the Average Return On Invested Capital for PAYC is above the industry average of 12.66%.
• The 3 year average ROIC (17.49%) for PAYC is below the current ROIC(23.25%), indicating increased profibility in the last year.
• PAYC's Profit Margin of 26.90% is amongst the best of the industry. PAYC outperforms 95.06% of its industry peers.
• PAYC has a better Operating Margin (33.11%) than 96.30% of its industry peers.
• PAYC has a Gross Margin of 83.37%. This is amongst the best in the industry. PAYC outperforms 92.59% of its industry peers.

Why is NYSE:PAYC a setup?

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for NYSE:PAYC is 7:

Although the technical rating is bad, PAYC does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 147.41. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 144.00, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

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

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

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.