PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
USA - NYSE:PAYC - US70432V1026 - Common Stock
187.09 USD
+1.8 (+0.97%)
187.09 USD
0 (0%)
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 has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. PAYC is not priced too expensively while it is growing strongly. Keep and eye on this one! This makes PAYC very considerable for growth and 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.
PAYC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of PAYC (10.31%) is better than 84.88% of its industry peers.
Looking at the Return On Equity, with a value of 23.07%, PAYC is in the better half of the industry, outperforming 75.58% of the companies in the same industry.
The Return On Invested Capital of PAYC (18.87%) is better than 90.70% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PAYC is significantly above the industry average of 13.22%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.31% | ||
| ROE | 23.07% | ||
| ROIC | 18.87% |
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
PAYC has a better Profit Margin (21.21%) than 93.02% 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 28.10%, 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's Gross Margin of 82.44% is amongst the best of the industry. PAYC outperforms 91.86% of its industry peers.
PAYC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.1% | ||
| PM (TTM) | 21.21% | ||
| GM | 82.44% |
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.
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 4.63 indicates that PAYC is not in any danger for bankruptcy at the moment.
PAYC's Altman-Z score of 4.63 is amongst the best of the industry. PAYC outperforms 83.72% of its industry peers.
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 | 4.63 |
ROIC/WACC2.16
WACC8.75%
2.3 Liquidity
A Current Ratio of 1.30 indicates that PAYC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.30, PAYC perfoms like the industry average, outperforming 44.19% of the companies in the same industry.
PAYC has a Quick Ratio of 1.30. 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 1.30, PAYC is in line with its industry, outperforming 44.19% 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 | 1.3 | ||
| Quick Ratio | 1.3 |
3. Growth
3.1 Past
PAYC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.88%, 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 10.21% in the last year.
Measured over the past years, PAYC shows a very strong growth in Revenue. The Revenue has been growing by 20.62% on average per year.
EPS 1Y (TTM)11.88%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%27.16%
Revenue 1Y (TTM)10.21%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%10.53%
3.2 Future
Based on estimates for the next years, PAYC will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.55% on average per year.
Based on estimates for the next years, PAYC will show a quite strong growth in Revenue. The Revenue will grow by 8.57% on average per year.
EPS Next Y15.24%
EPS Next 2Y11.97%
EPS Next 3Y12.22%
EPS Next 5Y12.55%
Revenue Next Year9.54%
Revenue Next 2Y9.34%
Revenue Next 3Y9.63%
Revenue Next 5Y8.57%
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.
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
PAYC is valuated rather expensively with a Price/Earnings ratio of 21.14.
The rest of the industry has a similar Price/Earnings ratio as PAYC.
PAYC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.10.
Based on the Price/Forward Earnings ratio of 18.20, the valuation of PAYC can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as PAYC.
PAYC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.14 | ||
| Fwd PE | 18.2 |
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 61.63% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as PAYC.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.67 | ||
| EV/EBITDA | 13.92 |
4.3 Compensation for Growth
PAYC's 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 12.22% in the coming years.
PEG (NY)1.39
PEG (5Y)1.14
EPS Next 2Y11.97%
EPS Next 3Y12.22%
5. Dividend
5.1 Amount
With a yearly dividend of 0.81%, PAYC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.98, PAYC pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.81, PAYC pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
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 20.52% of its income as dividend. This is a sustainable payout ratio.
DP20.52%
EPS Next 2Y11.97%
EPS Next 3Y12.22%
187.09
+1.8 (+0.97%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners92.08%
Inst Owner Change-0.15%
Ins Owners5.28%
Ins Owner Change0.04%
Market Cap10.53B
Revenue(TTM)1.96B
Net Income(TTM)415.74M
Analysts71.11
Price Target250.79 (34.05%)
Short Float %5.25%
Short Ratio4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
Yearly Dividend1.51
Dividend Growth(5Y)N/A
DP20.52%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.15%
Min EPS beat(2)7.08%
Max EPS beat(2)13.21%
EPS beat(4)4
Avg EPS beat(4)9.43%
Min EPS beat(4)1.82%
Max EPS beat(4)15.6%
EPS beat(8)7
Avg EPS beat(8)6.85%
EPS beat(12)10
Avg EPS beat(12)6.35%
EPS beat(16)13
Avg EPS beat(16)5.83%
Revenue beat(2)1
Avg Revenue beat(2)-0.38%
Min Revenue beat(2)-1.22%
Max Revenue beat(2)0.45%
Revenue beat(4)2
Avg Revenue beat(4)-0.24%
Min Revenue beat(4)-1.22%
Max Revenue beat(4)0.69%
Revenue beat(8)3
Avg Revenue beat(8)-0.76%
Revenue beat(12)4
Avg Revenue beat(12)-0.71%
Revenue beat(16)8
Avg Revenue beat(16)-0.32%
PT rev (1m)0.19%
PT rev (3m)1.86%
EPS NQ rev (1m)-0.48%
EPS NQ rev (3m)2%
EPS NY rev (1m)-0.25%
EPS NY rev (3m)3.28%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.79%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.14 | ||
| Fwd PE | 18.2 | ||
| P/S | 5.37 | ||
| P/FCF | 29.67 | ||
| P/OCF | 18.86 | ||
| P/B | 5.84 | ||
| P/tB | 6.17 | ||
| EV/EBITDA | 13.92 |
EPS(TTM)8.85
EY4.73%
EPS(NY)10.28
Fwd EY5.5%
FCF(TTM)6.31
FCFY3.37%
OCF(TTM)9.92
OCFY5.3%
SpS34.84
BVpS32.03
TBVpS30.32
PEG (NY)1.39
PEG (5Y)1.14
Graham Number79.86
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.31% | ||
| ROE | 23.07% | ||
| ROCE | 25.24% | ||
| ROIC | 18.87% | ||
| ROICexc | 24.95% | ||
| ROICexgc | 26.5% | ||
| OM | 28.1% | ||
| PM (TTM) | 21.21% | ||
| GM | 82.44% | ||
| FCFM | 18.1% |
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 Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 127.33% | ||
| Cap/Sales | 10.38% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.56% | ||
| Profit Quality | 85.34% | ||
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.3 | ||
| Altman-Z | 4.63 |
F-Score7
WACC8.75%
ROIC/WACC2.16
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)11.88%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%27.16%
EPS Next Y15.24%
EPS Next 2Y11.97%
EPS Next 3Y12.22%
EPS Next 5Y12.55%
Revenue 1Y (TTM)10.21%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%10.53%
Revenue Next Year9.54%
Revenue Next 2Y9.34%
Revenue Next 3Y9.63%
Revenue Next 5Y8.57%
EBIT growth 1Y-5.78%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year48.63%
EBIT Next 3Y22.25%
EBIT Next 5Y15.74%
FCF growth 1Y20.03%
FCF growth 3Y20.33%
FCF growth 5Y20.7%
OCF growth 1Y24.56%
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 4 / 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 9 / 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 20.52%.