PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
NYSE:PAYC • US70432V1026
125.31 USD
+5.55 (+4.63%)
At close: Feb 13, 2026
123 USD
-2.31 (-1.84%)
After Hours: 2/13/2026, 8:04:00 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 scores excellent on profitability, 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.
- In the past year PAYC had a positive cash flow from operations.
- 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.
- Looking at the Return On Equity, with a value of 26.19%, PAYC belongs to the top of the industry, outperforming 80.68% of the companies in the same industry.
- 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.
- PAYC had an Average Return On Invested Capital over the past 3 years of 21.34%. This is significantly above the industry average of 12.59%.
| 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
- PAYC has a better Profit Margin (22.10%) than 93.18% of its industry peers.
- In the last couple of years the Profit Margin of PAYC has grown nicely.
- Looking at the Operating Margin, with a value of 27.65%, PAYC belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
- In the last couple of years the Operating Margin of PAYC has grown nicely.
- The Gross Margin of PAYC (83.17%) is better than 94.32% of its industry peers.
- PAYC's Gross Margin has been stable in the last couple of years.
| 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
- PAYC has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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 1.71. This is a bad value and indicates that PAYC is not financially healthy and even has some risk of bankruptcy.
- PAYC has a worse Altman-Z score (1.71) than 60.23% 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 | 1.71 |
ROIC/WACC2.21
WACC8.68%
2.3 Liquidity
- A Current Ratio of 1.09 indicates that PAYC should not have too much problems paying 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.
- PAYC has a Quick ratio of 1.09. This is in the lower half of the industry: PAYC underperforms 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.
- Looking at the last year, PAYC shows a quite strong growth in Revenue. The Revenue has grown by 8.95% in the last year.
- PAYC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 19.51% yearly.
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
- The Earnings Per Share is expected to grow by 12.93% on average over the next years. This is quite good.
- Based on estimates for the next years, PAYC will show a small growth in Revenue. The Revenue will grow by 7.05% on average per year.
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
- With a Price/Earnings ratio of 13.55, PAYC is valued correctly.
- Based on the Price/Earnings ratio, PAYC is valued a bit cheaper than 73.86% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.19, PAYC is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 12.25, the valuation of PAYC can be described as correct.
- PAYC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PAYC is 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 28.06.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.55 | ||
| Fwd PE | 12.25 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, PAYC is valued a bit cheaper than the industry average as 77.27% of the companies are valued more expensively.
- PAYC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PAYC is cheaper than 69.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.05 | ||
| EV/EBITDA | 8.76 |
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.
- A more expensive valuation may be justified as PAYC's earnings are expected to grow with 14.35% in the coming years.
PEG (NY)1.28
PEG (5Y)0.63
EPS Next 2Y11.13%
EPS Next 3Y14.35%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.20%, PAYC has a reasonable but not impressive dividend return.
- The stock price of PAYC dropped by -24.57% 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 1.59, PAYC pays a bit more dividend than its industry peers.
- PAYC's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
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%
125.31
+5.55 (+4.63%)
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 Cap6.88B
Revenue(TTM)2.05B
Net Income(TTM)453.40M
Analysts72.14
Price Target202.09 (61.27%)
Short Float %6.31%
Short Ratio3.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
Yearly Dividend1.51
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 | 13.55 | ||
| Fwd PE | 12.25 | ||
| P/S | 3.35 | ||
| P/FCF | 17.05 | ||
| P/OCF | 10.14 | ||
| P/B | 3.97 | ||
| P/tB | 4.19 | ||
| EV/EBITDA | 8.76 |
EPS(TTM)9.25
EY7.38%
EPS(NY)10.23
Fwd EY8.16%
FCF(TTM)7.35
FCFY5.86%
OCF(TTM)12.36
OCFY9.87%
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 | 24.11% | ||
| 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 | 1.71 |
F-Score6
WACC8.68%
ROIC/WACC2.21
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 13.55 and the Price/Book (PB) ratio is 3.97.
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%.