PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
NYSE:PAYC • US70432V1026
114.71 USD
-6.01 (-4.98%)
At close: Feb 20, 2026
114.8 USD
+0.09 (+0.08%)
After Hours: 2/20/2026, 8:04:00 PM
PAYC gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 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 valued quite cheap, while showing a decent growth score. This is a good combination! These ratings would make PAYC suitable for value investing!
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.
- In the past 5 years PAYC always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of PAYC (5.97%) is better than 65.91% of its industry peers.
- With an excellent Return On Equity value of 26.19%, PAYC belongs to the best of the industry, outperforming 80.68% of the companies in the same industry.
- The Return On Invested Capital of PAYC (19.14%) is better than 85.23% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for PAYC is significantly above the industry average of 12.55%.
| 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
- The Profit Margin of PAYC (22.10%) is better than 93.18% of its industry peers.
- PAYC's Profit Margin has improved in the last couple of years.
- PAYC's Operating Margin of 27.65% is amongst the best of the industry. PAYC outperforms 95.45% of its industry peers.
- In the last couple of years the Operating Margin of PAYC has grown nicely.
- 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 | 27.65% | ||
| 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.
- The number of shares outstanding for PAYC has been reduced compared to 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 1.68. 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 (1.68) which is comparable to the rest of the 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 | 1.68 |
ROIC/WACC2.2
WACC8.72%
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 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.
- 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.
- Measured over the past years, PAYC shows a very strong growth in Earnings Per Share. The EPS has been growing by 21.52% on average per year.
- 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
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
- The Price/Earnings ratio is 12.40, which indicates a correct valuation of PAYC.
- Based on the Price/Earnings ratio, PAYC is valued a bit cheaper than 73.86% of the companies in the same industry.
- When comparing the Price/Earnings ratio of PAYC to the average of the S&P500 Index (26.99), we can say PAYC is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 11.21, the valuation of PAYC can be described as reasonable.
- Based on the Price/Forward Earnings ratio, PAYC is valued a bit cheaper than 73.86% of the companies in the same industry.
- PAYC is valuated cheaply when we compare the Price/Forward Earnings ratio to 28.06, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.4 | ||
| Fwd PE | 11.21 |
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.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of PAYC indicates a somewhat cheap valuation: PAYC is cheaper than 70.45% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.61 | ||
| EV/EBITDA | 8.42 |
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)1.17
PEG (5Y)0.58
EPS Next 2Y11.13%
EPS Next 3Y14.35%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.24%, PAYC has a reasonable but not impressive dividend return.
- The stock price of PAYC dropped by -29.25% 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.
- Compared to the average S&P500 Dividend Yield of 1.85, PAYC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
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
- 18.70% of the earnings are spent on dividend by PAYC. This is a low number and sustainable payout ratio.
DP18.7%
EPS Next 2Y11.13%
EPS Next 3Y14.35%
114.71
-6.01 (-4.98%)
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 Cap6.30B
Revenue(TTM)2.05B
Net Income(TTM)453.40M
Analysts72.14
Price Target202.09 (76.17%)
Short Float %7.01%
Short Ratio2.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
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 | 12.4 | ||
| Fwd PE | 11.21 | ||
| P/S | 3.07 | ||
| P/FCF | 15.61 | ||
| P/OCF | 9.28 | ||
| P/B | 3.64 | ||
| P/tB | 3.84 | ||
| EV/EBITDA | 8.42 |
EPS(TTM)9.25
EY8.06%
EPS(NY)10.23
Fwd EY8.92%
FCF(TTM)7.35
FCFY6.41%
OCF(TTM)12.36
OCFY10.78%
SpS37.36
BVpS31.53
TBVpS29.91
PEG (NY)1.17
PEG (5Y)0.58
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 | 1.68 |
F-Score6
WACC8.72%
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 7 / 10 to PAYCOM SOFTWARE INC (PAYC). This can be considered as Undervalued.
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 12.4 and the Price/Book (PB) ratio is 3.64.
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%.