PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PAYC - US70432V1026 - Common Stock
159.36 USD
-1.16 (-0.72%)
159.36 USD
0 (0%)
Taking everything into account, PAYC scores 7 out of 10 in our fundamental rating. PAYC was compared to 86 industry peers in the Professional Services industry. PAYC gets an excellent profitability rating and is at the same time showing great financial health properties. PAYC has a decent growth rate and is not valued too expensively. With these ratings, PAYC could be worth investigating further for quality investing!.
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.
PAYC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of PAYC (10.67%) is better than 83.72% of its industry peers.
PAYC has a better Return On Equity (26.51%) than 80.23% of its industry peers.
PAYC's Return On Invested Capital of 19.27% is amongst the best of the industry. PAYC outperforms 91.86% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PAYC is significantly above the industry average of 12.04%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 26.51% | ||
| ROIC | 19.27% |
ROA(3y)7.97%
ROA(5y)7.1%
ROE(3y)27.27%
ROE(5y)25.12%
ROIC(3y)21.04%
ROIC(5y)18.84%
1.3 Margins
With an excellent Profit Margin value of 22.64%, PAYC belongs to the best of the industry, outperforming 91.86% of the companies in the same industry.
PAYC's Profit Margin has improved in the last couple of years.
PAYC has a Operating Margin of 27.91%. This is amongst the best in the industry. PAYC outperforms 95.35% of its industry peers.
In the last couple of years the Operating Margin of PAYC has grown nicely.
With an excellent Gross Margin value of 82.95%, PAYC belongs to the best of the industry, outperforming 93.02% of the companies in the same industry.
PAYC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.91% | ||
| PM (TTM) | 22.64% | ||
| GM | 82.95% |
OM growth 3Y11.92%
OM growth 5Y1.9%
PM growth 3Y12.81%
PM growth 5Y1.73%
GM growth 3Y-0.97%
GM growth 5Y-0.69%
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.
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.
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
An Altman-Z score of 3.84 indicates that PAYC is not in any danger for bankruptcy at the moment.
PAYC has a Altman-Z score of 3.84. This is in the better half of the industry: PAYC outperforms 70.93% 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 | 3.84 |
ROIC/WACC2.19
WACC8.78%
2.3 Liquidity
A Current Ratio of 1.22 indicates that PAYC should not have too much problems paying its short term obligations.
The Current ratio of PAYC (1.22) is worse than 61.63% of its industry peers.
A Quick Ratio of 1.22 indicates that PAYC should not have too much problems paying its short term obligations.
PAYC has a worse Quick ratio (1.22) than 61.63% of its industry peers.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
PAYC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.77%, which is quite good.
Measured over the past years, PAYC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.56% on average per year.
The Revenue has grown by 9.72% in the past year. This is quite good.
Measured over the past years, PAYC shows a very strong growth in Revenue. The Revenue has been growing by 20.62% on average per year.
EPS 1Y (TTM)16.77%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%16.17%
Revenue 1Y (TTM)9.72%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%9.15%
3.2 Future
The Earnings Per Share is expected to grow by 13.00% on average over the next years. This is quite good.
PAYC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.21% yearly.
EPS Next Y15.33%
EPS Next 2Y11.88%
EPS Next 3Y11.88%
EPS Next 5Y13%
Revenue Next Year9.59%
Revenue Next 2Y9.19%
Revenue Next 3Y9.31%
Revenue Next 5Y7.21%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
The Price/Earnings ratio is 17.47, which indicates a rather expensive current valuation of PAYC.
PAYC's Price/Earnings ratio is a bit cheaper when compared to the industry. PAYC is cheaper than 67.44% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.51, PAYC is valued a bit cheaper.
A Price/Forward Earnings ratio of 15.53 indicates a correct valuation of PAYC.
PAYC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PAYC is cheaper than 66.28% of the companies in the same industry.
PAYC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.13, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.47 | ||
| Fwd PE | 15.53 |
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 70.93% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PAYC indicates a somewhat cheap valuation: PAYC is cheaper than 67.44% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.43 | ||
| EV/EBITDA | 11.64 |
4.3 Compensation for Growth
PAYC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of PAYC may justify a higher PE ratio.
PEG (NY)1.14
PEG (5Y)0.94
EPS Next 2Y11.88%
EPS Next 3Y11.88%
5. Dividend
5.1 Amount
PAYC has a yearly dividend return of 0.94%, which is pretty low.
The stock price of PAYC dropped by -21.05% 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 1.58, PAYC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.00, PAYC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.94% |
5.2 History
PAYC has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
18.80% of the earnings are spent on dividend by PAYC. This is a low number and sustainable payout ratio.
DP18.8%
EPS Next 2Y11.88%
EPS Next 3Y11.88%
159.36
-1.16 (-0.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners94.92%
Inst Owner Change0.01%
Ins Owners5.39%
Ins Owner Change-0.04%
Market Cap8.75B
Revenue(TTM)2.00B
Net Income(TTM)453.17M
Analysts71.11
Price Target213.31 (33.85%)
Short Float %5.11%
Short Ratio3.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.94% |
Yearly Dividend1.51
Dividend Growth(5Y)N/A
DP18.8%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.38%
Min EPS beat(2)-2.45%
Max EPS beat(2)13.21%
EPS beat(4)3
Avg EPS beat(4)8.36%
Min EPS beat(4)-2.45%
Max EPS beat(4)15.6%
EPS beat(8)6
Avg EPS beat(8)5.55%
EPS beat(12)9
Avg EPS beat(12)5.7%
EPS beat(16)13
Avg EPS beat(16)5.7%
Revenue beat(2)1
Avg Revenue beat(2)-0.73%
Min Revenue beat(2)-1.9%
Max Revenue beat(2)0.45%
Revenue beat(4)2
Avg Revenue beat(4)-0.5%
Min Revenue beat(4)-1.9%
Max Revenue beat(4)0.69%
Revenue beat(8)3
Avg Revenue beat(8)-0.61%
Revenue beat(12)3
Avg Revenue beat(12)-0.87%
Revenue beat(16)7
Avg Revenue beat(16)-0.47%
PT rev (1m)-0.42%
PT rev (3m)-16.28%
EPS NQ rev (1m)-0.15%
EPS NQ rev (3m)-1.82%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)-0.17%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.07%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.47 | ||
| Fwd PE | 15.53 | ||
| P/S | 4.37 | ||
| P/FCF | 22.43 | ||
| P/OCF | 13.6 | ||
| P/B | 5.12 | ||
| P/tB | 5.41 | ||
| EV/EBITDA | 11.64 |
EPS(TTM)9.12
EY5.72%
EPS(NY)10.26
Fwd EY6.44%
FCF(TTM)7.1
FCFY4.46%
OCF(TTM)11.71
OCFY7.35%
SpS36.45
BVpS31.13
TBVpS29.44
PEG (NY)1.14
PEG (5Y)0.94
Graham Number79.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 26.51% | ||
| ROCE | 25.78% | ||
| ROIC | 19.27% | ||
| ROICexc | 23.3% | ||
| ROICexgc | 24.57% | ||
| OM | 27.91% | ||
| PM (TTM) | 22.64% | ||
| GM | 82.95% | ||
| FCFM | 19.49% |
ROA(3y)7.97%
ROA(5y)7.1%
ROE(3y)27.27%
ROE(5y)25.12%
ROIC(3y)21.04%
ROIC(5y)18.84%
ROICexc(3y)26.79%
ROICexc(5y)23.85%
ROICexgc(3y)29.01%
ROICexgc(5y)25.99%
ROCE(3y)28.15%
ROCE(5y)25.21%
ROICexgc growth 3Y12.94%
ROICexgc growth 5Y1.1%
ROICexc growth 3Y15.14%
ROICexc growth 5Y1.63%
OM growth 3Y11.92%
OM growth 5Y1.9%
PM growth 3Y12.81%
PM growth 5Y1.73%
GM growth 3Y-0.97%
GM growth 5Y-0.69%
F-Score7
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 151.91% | ||
| Cap/Sales | 12.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 88.7% | ||
| Profit Quality | 86.07% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 3.84 |
F-Score7
WACC8.78%
ROIC/WACC2.19
Cap/Depr(3y)151.85%
Cap/Depr(5y)163.91%
Cap/Sales(3y)10.68%
Cap/Sales(5y)11.04%
Profit Quality(3y)77.58%
Profit Quality(5y)84.82%
High Growth Momentum
Growth
EPS 1Y (TTM)16.77%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%16.17%
EPS Next Y15.33%
EPS Next 2Y11.88%
EPS Next 3Y11.88%
EPS Next 5Y13%
Revenue 1Y (TTM)9.72%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%9.15%
Revenue Next Year9.59%
Revenue Next 2Y9.19%
Revenue Next 3Y9.31%
Revenue Next 5Y7.21%
EBIT growth 1Y-5.75%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year49.1%
EBIT Next 3Y22.1%
EBIT Next 5Y15.74%
FCF growth 1Y30.62%
FCF growth 3Y20.33%
FCF growth 5Y20.7%
OCF growth 1Y34.25%
OCF growth 3Y18.68%
OCF growth 5Y18.94%
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 5 / 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 17.47 and the Price/Book (PB) ratio is 5.12.
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 18.8%.