PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PAYC - US70432V1026 - Common Stock
159.97 USD
-5.45 (-3.29%)
We assign a fundamental rating of 7 out of 10 to PAYC. PAYC was compared to 86 industry peers in the Professional Services industry. PAYC scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 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.
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
The Return On Assets of PAYC (10.67%) is better than 83.72% of its industry peers.
PAYC has a Return On Equity of 26.51%. This is amongst the best in the industry. PAYC outperforms 80.23% of its industry peers.
PAYC has a Return On Invested Capital of 19.27%. This is amongst the best in 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 12.03%.
| 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
The Profit Margin of PAYC (22.64%) is better than 91.86% of its industry peers.
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.
In the last couple of years the Operating Margin of PAYC has grown nicely.
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.
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.
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 3.90 indicates that PAYC is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.90, PAYC is doing good in the industry, outperforming 70.93% of the companies in the same industry.
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 | 3.9 |
ROIC/WACC2.19
WACC8.81%
2.3 Liquidity
A Current Ratio of 1.22 indicates that PAYC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.22, PAYC is not doing good in the industry: 61.63% of the companies in the same industry are doing better.
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.
PAYC's Quick ratio of 1.22 is on the low side compared to the rest of the industry. PAYC is outperformed by 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
The Earnings Per Share has grown by an nice 16.77% over the past year.
The Earnings Per Share has been growing by 18.56% on average over the past years. This is quite good.
Looking at the last year, PAYC shows a quite strong growth in Revenue. The Revenue has grown by 9.72% in the last year.
PAYC shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 20.62% yearly.
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
PAYC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.00% yearly.
The Revenue is expected to grow by 7.21% on average over the next years.
EPS Next Y15.4%
EPS Next 2Y11.92%
EPS Next 3Y12.03%
EPS Next 5Y13%
Revenue Next Year9.59%
Revenue Next 2Y9.22%
Revenue Next 3Y9.35%
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.
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 17.54, which indicates a rather expensive current valuation of PAYC.
65.12% of the companies in the same industry are more expensive than PAYC, based on the Price/Earnings ratio.
PAYC is valuated rather cheaply when we compare the Price/Earnings ratio to 26.61, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 15.57 indicates a correct valuation of PAYC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PAYC indicates a somewhat cheap valuation: PAYC is cheaper than 65.12% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.01. PAYC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.54 | ||
| Fwd PE | 15.57 |
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.
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 | 22.52 | ||
| EV/EBITDA | 12.01 |
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.
A more expensive valuation may be justified as PAYC's earnings are expected to grow with 12.03% in the coming years.
PEG (NY)1.14
PEG (5Y)0.94
EPS Next 2Y11.92%
EPS Next 3Y12.03%
5. Dividend
5.1 Amount
With a yearly dividend of 0.91%, PAYC is not a good candidate for dividend investing.
The stock price of PAYC dropped by -23.95% 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 1.53, PAYC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 1.87, PAYC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.91% |
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
18.80% of the earnings are spent on dividend by PAYC. This is a low number and sustainable payout ratio.
DP18.8%
EPS Next 2Y11.92%
EPS Next 3Y12.03%
NYSE:PAYC (12/23/2025, 3:42:53 PM)
159.97
-5.45 (-3.29%)
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 Cap8.78B
Revenue(TTM)2.00B
Net Income(TTM)453.17M
Analysts71.11
Price Target214.21 (33.91%)
Short Float %5.27%
Short Ratio3.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.91% |
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)-14.59%
PT rev (3m)-15.93%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-1.67%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-0.15%
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 | 17.54 | ||
| Fwd PE | 15.57 | ||
| P/S | 4.39 | ||
| P/FCF | 22.52 | ||
| P/OCF | 13.66 | ||
| P/B | 5.14 | ||
| P/tB | 5.43 | ||
| EV/EBITDA | 12.01 |
EPS(TTM)9.12
EY5.7%
EPS(NY)10.27
Fwd EY6.42%
FCF(TTM)7.1
FCFY4.44%
OCF(TTM)11.71
OCFY7.32%
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 | 3.9 |
F-Score7
WACC8.81%
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 Y15.4%
EPS Next 2Y11.92%
EPS Next 3Y12.03%
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 2Y9.22%
Revenue Next 3Y9.35%
Revenue Next 5Y7.21%
EBIT growth 1Y-5.75%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year49.29%
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 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.
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%.