PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
NYSE:PAYC • US70432V1026
125.83 USD
-3.96 (-3.05%)
At close: Feb 27, 2026
125.83 USD
0 (0%)
After Hours: 2/27/2026, 8:26:02 PM
Taking everything into account, PAYC scores 7 out of 10 in our fundamental rating. 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 has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- PAYC had positive earnings in the past year.
- PAYC had a positive operating cash flow in the past year.
- In the past 5 years PAYC has always been profitable.
- In the past 5 years PAYC always reported a positive cash flow from operatings.
1.2 Ratios
- PAYC has a Return On Assets of 5.97%. This is in the better half of the industry: PAYC outperforms 64.77% of its industry peers.
- 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 better Return On Invested Capital (19.14%) than 84.09% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for PAYC is significantly above the industry average of 12.74%.
| 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 (27.64%) than 95.45% of its industry peers.
- PAYC's Operating Margin has improved in the last couple of years.
- PAYC has a better Gross Margin (83.17%) than 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 | 27.64% | ||
| 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
- PAYC has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- Compared to 1 year ago, PAYC has less shares outstanding
- The number of shares outstanding for PAYC has been reduced compared to 5 years ago.
- 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.
2.2 Solvency
- PAYC has an Altman-Z score of 1.71. 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 1.71. This is comparable to the rest of the industry: PAYC outperforms 40.91% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 1.71 |
ROIC/WACC2.22
WACC8.61%
2.3 Liquidity
- A Current Ratio of 1.09 indicates that PAYC should not have too much problems paying its short term obligations.
- PAYC's Current ratio of 1.09 is on the low side compared to the rest of the industry. PAYC is outperformed by 69.32% of its industry peers.
- A Quick Ratio of 1.09 indicates that PAYC should not have too much problems paying its short term obligations.
- The Quick ratio of PAYC (1.09) is worse than 70.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 12.80% over the past year.
- 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
- A Price/Earnings ratio of 13.60 indicates a correct valuation of PAYC.
- Compared to the rest of the industry, the Price/Earnings ratio of PAYC indicates a somewhat cheap valuation: PAYC is cheaper than 70.45% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.07, PAYC is valued a bit cheaper.
- The Price/Forward Earnings ratio is 12.30, which indicates a correct valuation of PAYC.
- 68.18% of the companies in the same industry are more expensive than PAYC, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of PAYC to the average of the S&P500 Index (28.05), we can say PAYC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.6 | ||
| Fwd PE | 12.3 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, PAYC is valued a bit cheaper than 76.14% of the companies in the same industry.
- 68.18% of the companies in the same industry are more expensive than PAYC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.12 | ||
| EV/EBITDA | 8.8 |
4.3 Compensation for Growth
- The 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.
- PAYC's earnings are expected to grow with 14.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.28
PEG (5Y)0.63
EPS Next 2Y11.13%
EPS Next 3Y14.35%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.16%, PAYC has a reasonable but not impressive dividend return.
- The stock price of PAYC dropped by -21.93% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
- Compared to an average industry Dividend Yield of 1.64, PAYC pays a bit more dividend than its industry peers.
- Compared to the average S&P500 Dividend Yield of 1.82, PAYC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
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%
125.83
-3.96 (-3.05%)
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-0.43%
Ins Owners5.42%
Ins Owner Change1.03%
Market Cap6.91B
Revenue(TTM)2.05B
Net Income(TTM)453.40M
Analysts72.14
Price Target159.96 (27.12%)
Short Float %7.01%
Short Ratio2.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
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)-23.24%
PT rev (3m)-25.33%
EPS NQ rev (1m)-1.03%
EPS NQ rev (3m)-0.67%
EPS NY rev (1m)-0.28%
EPS NY rev (3m)-0.59%
Revenue NQ rev (1m)-2.2%
Revenue NQ rev (3m)-2.09%
Revenue NY rev (1m)-1.58%
Revenue NY rev (3m)-1.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.6 | ||
| Fwd PE | 12.3 | ||
| P/S | 3.37 | ||
| P/FCF | 17.12 | ||
| P/OCF | 10.18 | ||
| P/B | 3.99 | ||
| P/tB | 4.21 | ||
| EV/EBITDA | 8.8 |
EPS(TTM)9.25
EY7.35%
EPS(NY)10.23
Fwd EY8.13%
FCF(TTM)7.35
FCFY5.84%
OCF(TTM)12.36
OCFY9.83%
SpS37.36
BVpS31.53
TBVpS29.91
PEG (NY)1.28
PEG (5Y)0.63
Graham Number81.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.97% | ||
| ROE | 26.19% | ||
| ROCE | 25.43% | ||
| ROIC | 19.14% | ||
| ROICexc | 22.95% | ||
| ROICexgc | 24.1% | ||
| OM | 27.64% | ||
| 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 | 270.05 | ||
| Cash Conversion | 91.32% | ||
| Profit Quality | 88.99% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 1.71 |
F-Score6
WACC8.61%
ROIC/WACC2.22
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-10.6%
EBIT growth 3Y14.41%
EBIT growth 5Y24.97%
EBIT Next Year40.68%
EBIT Next 3Y18.92%
EBIT Next 5Y16.24%
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 13.6 and the Price/Book (PB) ratio is 3.99.
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%.