PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PAYC - US70432V1026 - Common Stock
160.52 USD
-0.24 (-0.15%)
160.52 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. Both the health and profitability get an excellent rating, making PAYC a very profitable company, without any liquidiy or solvency issues. PAYC has a decent growth rate and is not valued too expensively. These ratings would make PAYC suitable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year PAYC was profitable.
In the past year PAYC had a positive cash flow from operations.
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 10.67%, PAYC belongs to the top of the industry, outperforming 83.72% of the companies in the same industry.
PAYC's Return On Equity of 26.51% is amongst the best of the industry. PAYC outperforms 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.
Looking at the Operating Margin, with a value of 27.91%, PAYC belongs to the top of the industry, outperforming 95.35% of the companies in the same industry.
PAYC's Operating Margin has improved in the last couple of years.
PAYC has a better Gross Margin (82.95%) than 93.02% of its industry peers.
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
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
Compared to 5 years ago, PAYC has less shares outstanding
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
An Altman-Z score of 3.84 indicates that PAYC is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.84, PAYC is doing good in the industry, outperforming 70.93% of the companies in the same industry.
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 | 3.84 |
ROIC/WACC2.2
WACC8.76%
2.3 Liquidity
PAYC has a Current Ratio of 1.22. This is a normal value and indicates that PAYC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.22, PAYC is doing worse than 61.63% of the companies in the same industry.
PAYC has a Quick Ratio of 1.22. This is a normal value and indicates that PAYC is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of PAYC (1.22) is worse than 61.63% of its industry peers.
The current and quick ratio evaluation for PAYC is rather negative, while it does have 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.
PAYC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.56% yearly.
Looking at the last year, PAYC shows a quite strong growth in Revenue. The Revenue has grown by 9.72% in the last year.
The Revenue has been growing by 20.62% on average over the past years. This is a very strong growth!
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
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
PAYC is valuated rather expensively with a Price/Earnings ratio of 17.60.
Compared to the rest of the industry, the Price/Earnings ratio of PAYC indicates a somewhat cheap valuation: PAYC is cheaper than 67.44% of the companies listed in the same industry.
PAYC is valuated rather cheaply when we compare the Price/Earnings ratio to 26.77, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 15.64, PAYC is valued correctly.
66.28% of the companies in the same industry are more expensive than PAYC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.35. PAYC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.6 | ||
| Fwd PE | 15.64 |
4.2 Price Multiples
70.93% of the companies in the same industry are more expensive than PAYC, based on the Enterprise Value to EBITDA ratio.
67.44% 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 | 22.6 | ||
| EV/EBITDA | 11.64 |
4.3 Compensation for Growth
The 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)1.15
PEG (5Y)0.95
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.
In the last 3 months the price of PAYC has falen by -20.48%. 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 1.58.
With a Dividend Yield of 0.94, PAYC pays less dividend than the S&P500 average, which is at 2.00.
| 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
PAYC pays out 18.80% of its income as dividend. This is a sustainable payout ratio.
DP18.8%
EPS Next 2Y11.88%
EPS Next 3Y11.88%
160.52
-0.24 (-0.15%)
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 Cap8.81B
Revenue(TTM)2.00B
Net Income(TTM)453.17M
Analysts71.11
Price Target213.31 (32.89%)
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-Date
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 | 17.6 | ||
| Fwd PE | 15.64 | ||
| P/S | 4.4 | ||
| P/FCF | 22.6 | ||
| P/OCF | 13.7 | ||
| P/B | 5.16 | ||
| P/tB | 5.45 | ||
| EV/EBITDA | 11.64 |
EPS(TTM)9.12
EY5.68%
EPS(NY)10.26
Fwd EY6.39%
FCF(TTM)7.1
FCFY4.43%
OCF(TTM)11.71
OCFY7.3%
SpS36.45
BVpS31.13
TBVpS29.44
PEG (NY)1.15
PEG (5Y)0.95
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
WACC8.76%
ROIC/WACC2.2
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 ChartMill fundamental rating of PAYCOM SOFTWARE INC (PAYC) stock?
ChartMill assigns a fundamental rating of 7 / 10 to PAYC.
What is the valuation status for PAYC stock?
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.
How financially healthy is PAYCOM SOFTWARE INC?
The financial health rating of PAYCOM SOFTWARE INC (PAYC) is 8 / 10.
Is the dividend of PAYCOM SOFTWARE INC sustainable?
The dividend rating of PAYCOM SOFTWARE INC (PAYC) is 3 / 10 and the dividend payout ratio is 18.8%.