PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PAYC - US70432V1026 - Common Stock
158.94 USD
+1.77 (+1.13%)
158.94 USD
0 (0%)
PAYC gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 87 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 correct valuation and a medium growth rate. This makes PAYC very considerable for quality 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
Looking at the Return On Assets, with a value of 10.67%, PAYC belongs to the top of the industry, outperforming 83.91% of the companies in the same industry.
PAYC has a Return On Equity of 26.51%. This is amongst the best in the industry. PAYC outperforms 81.61% of its industry peers.
Looking at the Return On Invested Capital, with a value of 19.27%, PAYC belongs to the top of the industry, outperforming 90.80% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PAYC is significantly above the industry average of 11.85%.
| 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 91.95% of its industry peers.
In the last couple of years the Profit Margin of PAYC has grown nicely.
PAYC's Operating Margin of 27.91% is amongst the best of the industry. PAYC outperforms 95.40% of its industry peers.
PAYC's Operating Margin has improved in the last couple of years.
The Gross Margin of PAYC (82.95%) is better than 94.25% 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 | 27.91% | ||
| 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
PAYC has less shares outstanding than it did 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 3.79 indicates that PAYC is not in any danger for bankruptcy at the moment.
PAYC's Altman-Z score of 3.79 is fine compared to the rest of the industry. PAYC outperforms 70.11% 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 | 3.79 |
ROIC/WACC2.18
WACC8.82%
2.3 Liquidity
A Current Ratio of 1.22 indicates that PAYC should not have too much problems paying its short term obligations.
PAYC's Current ratio of 1.22 is on the low side compared to the rest of the industry. PAYC is outperformed by 60.92% of its industry peers.
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.
Looking at the Quick ratio, with a value of 1.22, PAYC is doing worse than 60.92% of the companies in the same industry.
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
The Earnings Per Share has grown by an nice 16.77% over the past year.
PAYC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.56% yearly.
PAYC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.72%.
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
PAYC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.97% yearly.
PAYC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.12% yearly.
EPS Next Y15.33%
EPS Next 2Y11.88%
EPS Next 3Y11.88%
EPS Next 5Y12.97%
Revenue Next Year9.59%
Revenue Next 2Y9.19%
Revenue Next 3Y9.31%
Revenue Next 5Y7.12%
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
With a Price/Earnings ratio of 17.43, PAYC is valued on the expensive side.
68.97% of the companies in the same industry are more expensive than PAYC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.25, PAYC is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 15.49, the valuation of PAYC can be described as correct.
Based on the Price/Forward Earnings ratio, PAYC is valued a bit cheaper than the industry average as 68.97% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.98, PAYC is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.43 | ||
| Fwd PE | 15.49 |
4.2 Price Multiples
72.41% of the companies in the same industry are more expensive than PAYC, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PAYC indicates a somewhat cheap valuation: PAYC is cheaper than 68.97% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.38 | ||
| EV/EBITDA | 11.38 |
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)1.14
PEG (5Y)0.94
EPS Next 2Y11.88%
EPS Next 3Y11.88%
5. Dividend
5.1 Amount
With a yearly dividend of 0.95%, PAYC is not a good candidate for dividend investing.
In the last 3 months the price of PAYC has falen by -20.80%. 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 1.48.
With a Dividend Yield of 0.95, PAYC pays less dividend than the S&P500 average, which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
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%
158.94
+1.77 (+1.13%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners95.05%
Inst Owner Change0.23%
Ins Owners5.42%
Ins Owner Change-0.04%
Market Cap8.73B
Revenue(TTM)2.00B
Net Income(TTM)453.17M
Analysts72.14
Price Target213.31 (34.21%)
Short Float %5.11%
Short Ratio3.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
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)-16.44%
EPS NQ rev (1m)-0.15%
EPS NQ rev (3m)-1.51%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)-0.17%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.05%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.43 | ||
| Fwd PE | 15.49 | ||
| P/S | 4.36 | ||
| P/FCF | 22.38 | ||
| P/OCF | 13.57 | ||
| P/B | 5.11 | ||
| P/tB | 5.4 | ||
| EV/EBITDA | 11.38 |
EPS(TTM)9.12
EY5.74%
EPS(NY)10.26
Fwd EY6.46%
FCF(TTM)7.1
FCFY4.47%
OCF(TTM)11.71
OCFY7.37%
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 | 3.79 |
F-Score7
WACC8.82%
ROIC/WACC2.18
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 5Y12.97%
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 5Y7.12%
EBIT growth 1Y-5.75%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year49.1%
EBIT Next 3Y22.1%
EBIT Next 5Y15.68%
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 17.43 and the Price/Book (PB) ratio is 5.11.
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%.