PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
NYSE:PAYC • US70432V1026
124.22 USD
+1.9 (+1.55%)
At close: Feb 18, 2026
124.22 USD
0 (0%)
After Hours: 2/18/2026, 7:00:00 PM
We assign a fundamental rating of 7 out of 10 to PAYC. PAYC was compared to 88 industry peers in the Professional Services industry. PAYC has an excellent profitability rating, but there are some minor concerns on its financial health. PAYC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year PAYC was profitable.
- PAYC had a positive operating cash flow in the past year.
- PAYC had positive earnings in each of the past 5 years.
- Each year in the past 5 years PAYC had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.97%, PAYC is in the better half of the industry, outperforming 65.91% of the companies in the same industry.
- PAYC has a Return On Equity of 26.19%. This is amongst the best in the industry. PAYC outperforms 80.68% of its industry peers.
- PAYC has a Return On Invested Capital of 19.14%. This is amongst the best in the industry. PAYC outperforms 85.23% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for PAYC is significantly above the industry average of 12.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.97% | ||
| ROE | 26.19% | ||
| ROIC | 19.14% |
ROA(3y)7.55%
ROA(5y)7.19%
ROE(3y)28.06%
ROE(5y)25.98%
ROIC(3y)21.34%
ROIC(5y)19.66%
1.3 Margins
- With an excellent Profit Margin value of 22.10%, PAYC belongs to the best of the industry, outperforming 93.18% of the companies in the same industry.
- In the last couple of years the Profit Margin of PAYC has grown nicely.
- PAYC has a better Operating Margin (27.65%) than 95.45% of its industry peers.
- In the last couple of years the Operating Margin of PAYC has grown nicely.
- PAYC's Gross Margin of 83.17% is amongst the best of the industry. PAYC outperforms 94.32% of its industry peers.
- In the last couple of years the Gross Margin of PAYC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.65% | ||
| PM (TTM) | 22.1% | ||
| GM | 83.17% |
OM growth 3Y0.13%
OM growth 5Y4.56%
PM growth 3Y2.6%
PM growth 5Y5.32%
GM growth 3Y-0.54%
GM growth 5Y-0.51%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PAYC is creating value.
- PAYC has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for PAYC has been reduced compared to 5 years ago.
- PAYC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- PAYC has an Altman-Z score of 1.69. This is a bad value and indicates that PAYC is not financially healthy and even has some risk of bankruptcy.
- PAYC has a Altman-Z score of 1.69. This is comparable to the rest of the industry: PAYC outperforms 40.91% of its industry peers.
- PAYC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 1.69 |
ROIC/WACC2.2
WACC8.69%
2.3 Liquidity
- PAYC has a Current Ratio of 1.09. This is a normal value and indicates that PAYC is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of PAYC (1.09) is worse than 70.45% of its industry peers.
- A Quick Ratio of 1.09 indicates that PAYC should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.09, PAYC is doing worse than 70.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
- PAYC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.80%, which is quite good.
- PAYC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 21.52% yearly.
- PAYC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.95%.
- Measured over the past years, PAYC shows a quite strong growth in Revenue. The Revenue has been growing by 19.51% on average per year.
EPS 1Y (TTM)12.8%
EPS 3Y14.51%
EPS 5Y21.52%
EPS Q2Q%5.6%
Revenue 1Y (TTM)8.95%
Revenue growth 3Y14.27%
Revenue growth 5Y19.51%
Sales Q2Q%10.23%
3.2 Future
- PAYC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.93% yearly.
- The Revenue is expected to grow by 7.05% on average over the next years.
EPS Next Y10.6%
EPS Next 2Y11.13%
EPS Next 3Y14.35%
EPS Next 5Y12.93%
Revenue Next Year6.98%
Revenue Next 2Y7.2%
Revenue Next 3Y7.39%
Revenue Next 5Y7.05%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- PAYC is valuated correctly with a Price/Earnings ratio of 13.43.
- 73.86% of the companies in the same industry are more expensive than PAYC, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of PAYC to the average of the S&P500 Index (27.27), we can say PAYC is valued rather cheaply.
- With a Price/Forward Earnings ratio of 12.14, PAYC is valued correctly.
- Based on the Price/Forward Earnings ratio, PAYC is valued a bit cheaper than 72.73% of the companies in the same industry.
- PAYC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.16.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.43 | ||
| Fwd PE | 12.14 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PAYC indicates a somewhat cheap valuation: PAYC is cheaper than 78.41% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, PAYC is valued a bit cheaper than 69.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.9 | ||
| EV/EBITDA | 8.54 |
4.3 Compensation for Growth
- PAYC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- PAYC has an outstanding profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as PAYC's earnings are expected to grow with 14.35% in the coming years.
PEG (NY)1.27
PEG (5Y)0.62
EPS Next 2Y11.13%
EPS Next 3Y14.35%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.23%, PAYC has a reasonable but not impressive dividend return.
- In the last 3 months the price of PAYC has falen by -23.39%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- PAYC's Dividend Yield is a higher than the industry average which is at 1.59.
- PAYC's Dividend Yield is slightly below the S&P500 average, which is at 1.84.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
5.2 History
- PAYC has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- PAYC pays out 18.70% of its income as dividend. This is a sustainable payout ratio.
DP18.7%
EPS Next 2Y11.13%
EPS Next 3Y14.35%
124.22
+1.9 (+1.55%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)02-11 2026-02-11/amc
Earnings (Next)05-05 2026-05-05/amc
Inst Owners95.05%
Inst Owner Change-1.47%
Ins Owners5.42%
Ins Owner Change0.13%
Market Cap6.82B
Revenue(TTM)2.05B
Net Income(TTM)453.40M
Analysts72.14
Price Target202.09 (62.69%)
Short Float %7.01%
Short Ratio2.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
Yearly Dividend1.53
Dividend Growth(5Y)N/A
DP18.7%
Div Incr Years1
Div Non Decr Years1
Ex-Date03-09 2026-03-09 (0.375)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.92%
Min EPS beat(2)-2.45%
Max EPS beat(2)-1.4%
EPS beat(4)2
Avg EPS beat(4)4.11%
Min EPS beat(4)-2.45%
Max EPS beat(4)13.21%
EPS beat(8)5
Avg EPS beat(8)4.59%
EPS beat(12)8
Avg EPS beat(12)4.42%
EPS beat(16)12
Avg EPS beat(16)5.58%
Revenue beat(2)0
Avg Revenue beat(2)-1.81%
Min Revenue beat(2)-1.9%
Max Revenue beat(2)-1.73%
Revenue beat(4)1
Avg Revenue beat(4)-1.1%
Min Revenue beat(4)-1.9%
Max Revenue beat(4)0.45%
Revenue beat(8)2
Avg Revenue beat(8)-0.93%
Revenue beat(12)3
Avg Revenue beat(12)-0.94%
Revenue beat(16)6
Avg Revenue beat(16)-0.66%
PT rev (1m)-5.26%
PT rev (3m)-19.42%
EPS NQ rev (1m)-0.1%
EPS NQ rev (3m)-0.6%
EPS NY rev (1m)-0.08%
EPS NY rev (3m)-0.13%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.01%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.43 | ||
| Fwd PE | 12.14 | ||
| P/S | 3.32 | ||
| P/FCF | 16.9 | ||
| P/OCF | 10.05 | ||
| P/B | 3.94 | ||
| P/tB | 4.15 | ||
| EV/EBITDA | 8.54 |
EPS(TTM)9.25
EY7.45%
EPS(NY)10.23
Fwd EY8.24%
FCF(TTM)7.35
FCFY5.92%
OCF(TTM)12.36
OCFY9.95%
SpS37.36
BVpS31.53
TBVpS29.91
PEG (NY)1.27
PEG (5Y)0.62
Graham Number81.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.97% | ||
| ROE | 26.19% | ||
| ROCE | 25.43% | ||
| ROIC | 19.14% | ||
| ROICexc | 22.95% | ||
| ROICexgc | 24.11% | ||
| OM | 27.65% | ||
| PM (TTM) | 22.1% | ||
| GM | 83.17% | ||
| FCFM | 19.67% |
ROA(3y)7.55%
ROA(5y)7.19%
ROE(3y)28.06%
ROE(5y)25.98%
ROIC(3y)21.34%
ROIC(5y)19.66%
ROICexc(3y)26.18%
ROICexc(5y)24.81%
ROICexgc(3y)27.93%
ROICexgc(5y)26.92%
ROCE(3y)28.35%
ROCE(5y)26.12%
ROICexgc growth 3Y-4.84%
ROICexgc growth 5Y3.38%
ROICexc growth 3Y-3.25%
ROICexc growth 5Y3.88%
OM growth 3Y0.13%
OM growth 5Y4.56%
PM growth 3Y2.6%
PM growth 5Y5.32%
GM growth 3Y-0.54%
GM growth 5Y-0.51%
F-Score6
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 156.21% | ||
| Cap/Sales | 13.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.31% | ||
| Profit Quality | 88.99% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 1.69 |
F-Score6
WACC8.69%
ROIC/WACC2.2
Cap/Depr(3y)154.73%
Cap/Depr(5y)159.91%
Cap/Sales(3y)11.84%
Cap/Sales(5y)11.49%
Profit Quality(3y)80.21%
Profit Quality(5y)84.06%
High Growth Momentum
Growth
EPS 1Y (TTM)12.8%
EPS 3Y14.51%
EPS 5Y21.52%
EPS Q2Q%5.6%
EPS Next Y10.6%
EPS Next 2Y11.13%
EPS Next 3Y14.35%
EPS Next 5Y12.93%
Revenue 1Y (TTM)8.95%
Revenue growth 3Y14.27%
Revenue growth 5Y19.51%
Sales Q2Q%10.23%
Revenue Next Year6.98%
Revenue Next 2Y7.2%
Revenue Next 3Y7.39%
Revenue Next 5Y7.05%
EBIT growth 1Y-10.58%
EBIT growth 3Y14.41%
EBIT growth 5Y24.97%
EBIT Next Year40.24%
EBIT Next 3Y19.07%
EBIT Next 5Y16.23%
FCF growth 1Y19.88%
FCF growth 3Y20.91%
FCF growth 5Y24.83%
OCF growth 1Y27.16%
OCF growth 3Y22.97%
OCF growth 5Y24.47%
PAYCOM SOFTWARE INC / PAYC FAQ
What is the fundamental rating for PAYC stock?
ChartMill assigns a fundamental rating of 7 / 10 to PAYC.
Can you provide the valuation status for PAYCOM SOFTWARE INC?
ChartMill assigns a valuation rating of 6 / 10 to PAYCOM SOFTWARE INC (PAYC). This can be considered as Fairly Valued.
How profitable is PAYCOM SOFTWARE INC (PAYC) stock?
PAYCOM SOFTWARE INC (PAYC) has a profitability rating of 9 / 10.
What are the PE and PB ratios of PAYCOM SOFTWARE INC (PAYC) stock?
The Price/Earnings (PE) ratio for PAYCOM SOFTWARE INC (PAYC) is 13.43 and the Price/Book (PB) ratio is 3.94.
How sustainable is the dividend of PAYCOM SOFTWARE INC (PAYC) stock?
The dividend rating of PAYCOM SOFTWARE INC (PAYC) is 3 / 10 and the dividend payout ratio is 18.7%.