NYSE:PAYC, a strong growth stock, setting up for a breakout.

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if PAYCOM SOFTWARE INC (NYSE:PAYC) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted PAYCOM SOFTWARE INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

How do we evaluate the Growth for NYSE:PAYC?

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:PAYC has received a 8 out of 10:

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

Assessing Health Metrics for NYSE:PAYC

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 3.11 indicates that PAYC is not in any danger for bankruptcy at the moment.
• PAYC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the 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.

Profitability Analysis 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:

• With an excellent Return On Assets value of 9.90%, PAYC belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
• The Return On Equity of PAYC (32.59%) is better than 85.00% of its industry peers.
• The Return On Invested Capital of PAYC (23.25%) is better than 91.25% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for PAYC is above the industry average of 12.74%.
• The last Return On Invested Capital (23.25%) for PAYC is above the 3 year average (17.49%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 26.90%, PAYC belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
• The Operating Margin of PAYC (33.11%) is better than 96.25% of its industry peers.
• With an excellent Gross Margin value of 83.37%, PAYC belongs to the best of the industry, outperforming 92.50% of the companies in the same industry.

How does the Setup look for NYSE:PAYC

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:PAYC currently has a 7 as setup rating:

Although the technical rating is bad, PAYC does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 165.48. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 154.78, a Stop Loss order could be placed below this zone.

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

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

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

Keep in mind

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.