PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PAYC - US70432V1026 - Common Stock
161.81 USD
+0.64 (+0.4%)
161.81 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to PAYC. PAYC was compared to 87 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 has a correct valuation and a medium growth rate. These ratings would make PAYC suitable for quality investing!
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
With an excellent Return On Assets value of 10.67%, PAYC belongs to the best of the industry, outperforming 83.91% of the companies in the same industry.
PAYC's Return On Equity of 26.51% is amongst the best of the industry. PAYC outperforms 80.46% of its industry peers.
The Return On Invested Capital of PAYC (19.27%) is better than 90.80% of its industry peers.
PAYC had an Average Return On Invested Capital over the past 3 years of 21.04%. This is significantly above the industry average of 12.15%.
| 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 90.80% of its industry peers.
PAYC's Profit Margin has improved in the last couple of years.
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.
Looking at the Gross Margin, with a value of 82.95%, PAYC belongs to the top of the industry, outperforming 91.95% of the companies in the same industry.
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.
PAYC has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, PAYC has less shares outstanding
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 3.84 indicates that PAYC is not in any danger for bankruptcy at the moment.
The Altman-Z score of PAYC (3.84) is better than 71.26% 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 | 3.84 |
ROIC/WACC2.22
WACC8.66%
2.3 Liquidity
PAYC has a Current 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.
With a Current ratio value of 1.22, PAYC is not doing good in the industry: 63.22% of the companies in the same industry are doing better.
A Quick Ratio of 1.22 indicates that PAYC should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.22, PAYC is not doing good in the industry: 63.22% of the companies in the same industry are doing better.
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.
Measured over the past years, PAYC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.56% on average per year.
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
The Earnings Per Share is expected to grow by 13.00% on average over the next years. This is quite good.
PAYC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.21% yearly.
EPS Next Y15.39%
EPS Next 2Y12.03%
EPS Next 3Y12.21%
EPS Next 5Y13%
Revenue Next Year9.54%
Revenue Next 2Y9.34%
Revenue Next 3Y9.63%
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.
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 17.74.
Based on the Price/Earnings ratio, PAYC is valued a bit cheaper than 62.07% of the companies in the same industry.
PAYC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.11.
The Price/Forward Earnings ratio is 15.72, which indicates a correct valuation of PAYC.
62.07% of the companies in the same industry are more expensive than PAYC, based on the Price/Forward Earnings ratio.
PAYC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.21.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.74 | ||
| Fwd PE | 15.72 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PAYC is valued a bit cheaper than the industry average as 71.26% 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 64.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.78 | ||
| EV/EBITDA | 11.69 |
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 12.21% in the coming years.
PEG (NY)1.15
PEG (5Y)0.96
EPS Next 2Y12.03%
EPS Next 3Y12.21%
5. Dividend
5.1 Amount
PAYC has a yearly dividend return of 0.93%, which is pretty low.
In the last 3 months the price of PAYC has falen by -27.80%. 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 4.07.
With a Dividend Yield of 0.93, PAYC pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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 2Y12.03%
EPS Next 3Y12.21%
161.81
+0.64 (+0.4%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners92.08%
Inst Owner Change-0.01%
Ins Owners5.28%
Ins Owner Change-0.03%
Market Cap8.88B
Revenue(TTM)2.00B
Net Income(TTM)453.17M
Analysts71.11
Price Target214.21 (32.38%)
Short Float %5.67%
Short Ratio3.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
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)-16.09%
PT rev (3m)-15.93%
EPS NQ rev (1m)-1.02%
EPS NQ rev (3m)-1.71%
EPS NY rev (1m)0.13%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0.03%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.74 | ||
| Fwd PE | 15.72 | ||
| P/S | 4.44 | ||
| P/FCF | 22.78 | ||
| P/OCF | 13.81 | ||
| P/B | 5.2 | ||
| P/tB | 5.5 | ||
| EV/EBITDA | 11.69 |
EPS(TTM)9.12
EY5.64%
EPS(NY)10.29
Fwd EY6.36%
FCF(TTM)7.1
FCFY4.39%
OCF(TTM)11.71
OCFY7.24%
SpS36.45
BVpS31.13
TBVpS29.44
PEG (NY)1.15
PEG (5Y)0.96
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 | 3.84 |
F-Score7
WACC8.66%
ROIC/WACC2.22
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 Y15.39%
EPS Next 2Y12.03%
EPS Next 3Y12.21%
EPS Next 5Y13%
Revenue 1Y (TTM)9.72%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%9.15%
Revenue Next Year9.54%
Revenue Next 2Y9.34%
Revenue Next 3Y9.63%
Revenue Next 5Y7.21%
EBIT growth 1Y-5.75%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year48.63%
EBIT Next 3Y22.25%
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%.