PAYCHEX INC (PAYX) Fundamental Analysis & Valuation

NASDAQ:PAYX • US7043261079

Current stock price

93.09 USD
+1.13 (+1.23%)
At close:
93.09 USD
0 (0%)
After Hours:

This PAYX fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

9

1. PAYX Profitability Analysis

1.1 Basic Checks

  • PAYX had positive earnings in the past year.
  • PAYX had a positive operating cash flow in the past year.
  • Each year in the past 5 years PAYX has been profitable.
  • PAYX had a positive operating cash flow in each of the past 5 years.
PAYX Yearly Net Income VS EBIT VS OCF VS FCFPAYX Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B 2B

1.2 Ratios

  • The Return On Assets of PAYX (9.35%) is better than 79.07% of its industry peers.
  • The Return On Equity of PAYX (40.78%) is better than 90.70% of its industry peers.
  • The Return On Invested Capital of PAYX (19.72%) is better than 88.37% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for PAYX is significantly above the industry average of 12.84%.
  • The 3 year average ROIC (28.05%) for PAYX is well above the current ROIC(19.72%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 9.35%
ROE 40.78%
ROIC 19.72%
ROA(3y)13.68%
ROA(5y)13.48%
ROE(3y)43.07%
ROE(5y)42.31%
ROIC(3y)28.05%
ROIC(5y)28.53%
PAYX Yearly ROA, ROE, ROICPAYX Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

1.3 Margins

  • PAYX has a better Profit Margin (25.84%) than 94.19% of its industry peers.
  • In the last couple of years the Profit Margin of PAYX has grown nicely.
  • Looking at the Operating Margin, with a value of 39.36%, PAYX belongs to the top of the industry, outperforming 97.67% of the companies in the same industry.
  • PAYX's Operating Margin has improved in the last couple of years.
  • Looking at the Gross Margin, with a value of 91.37%, PAYX belongs to the top of the industry, outperforming 97.67% of the companies in the same industry.
  • In the last couple of years the Gross Margin of PAYX has remained more or less at the same level.
Industry RankSector Rank
OM 39.36%
PM (TTM) 25.84%
GM 91.37%
OM growth 3Y1.57%
OM growth 5Y2.95%
PM growth 3Y-0.51%
PM growth 5Y1.82%
GM growth 3Y-0.99%
GM growth 5Y-0.7%
PAYX Yearly Profit, Operating, Gross MarginsPAYX Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80

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4

2. PAYX Health Analysis

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PAYX is creating value.
  • PAYX has about the same amout of shares outstanding than it did 1 year ago.
  • Compared to 5 years ago, PAYX has more shares outstanding
  • PAYX has a worse debt/assets ratio than last year.
PAYX Yearly Shares OutstandingPAYX Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M
PAYX Yearly Total Debt VS Total AssetsPAYX Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B

2.2 Solvency

  • An Altman-Z score of 2.60 indicates that PAYX is not a great score, but indicates only limited risk for bankruptcy at the moment.
  • PAYX has a Altman-Z score (2.60) which is in line with its industry peers.
  • The Debt to FCF ratio of PAYX is 2.41, which is a good value as it means it would take PAYX, 2.41 years of fcf income to pay off all of its debts.
  • PAYX has a better Debt to FCF ratio (2.41) than 62.79% of its industry peers.
  • PAYX has a Debt/Equity ratio of 1.13. This is a high value indicating a heavy dependency on external financing.
  • PAYX has a worse Debt to Equity ratio (1.13) than 77.91% of its industry peers.
  • Although PAYX's pure debt/equity ratio does not look good, it has limited outstanding debt compared to the Free Cash Flow. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
Industry RankSector Rank
Debt/Equity 1.13
Debt/FCF 2.41
Altman-Z 2.6
ROIC/WACC2.38
WACC8.27%
PAYX Yearly LT Debt VS Equity VS FCFPAYX Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B

2.3 Liquidity

  • A Current Ratio of 1.26 indicates that PAYX should not have too much problems paying its short term obligations.
  • Looking at the Current ratio, with a value of 1.26, PAYX is doing worse than 61.63% of the companies in the same industry.
  • PAYX has a Quick Ratio of 1.26. This is a normal value and indicates that PAYX is financially healthy and should not expect problems in meeting its short term obligations.
  • PAYX's Quick ratio of 1.26 is on the low side compared to the rest of the industry. PAYX is outperformed by 61.63% of its industry peers.
Industry RankSector Rank
Current Ratio 1.26
Quick Ratio 1.26
PAYX Yearly Current Assets VS Current LiabilitesPAYX Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. PAYX Growth Analysis

3.1 Past

  • PAYX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.57%, which is quite good.
  • The Earnings Per Share has been growing by 10.74% on average over the past years. This is quite good.
  • Looking at the last year, PAYX shows a quite strong growth in Revenue. The Revenue has grown by 16.44% in the last year.
  • PAYX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.64% yearly.
EPS 1Y (TTM)9.57%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%14.77%
Revenue 1Y (TTM)16.44%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%19.87%

3.2 Future

  • PAYX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.20% yearly.
  • Based on estimates for the next years, PAYX will show a small growth in Revenue. The Revenue will grow by 7.57% on average per year.
EPS Next Y12.57%
EPS Next 2Y9.97%
EPS Next 3Y8.86%
EPS Next 5Y8.2%
Revenue Next Year17.06%
Revenue Next 2Y11.13%
Revenue Next 3Y9.21%
Revenue Next 5Y7.57%

3.3 Evolution

  • The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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 stable.
PAYX Yearly Revenue VS EstimatesPAYX Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2B 4B 6B 8B
PAYX Yearly EPS VS EstimatesPAYX Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2 4 6

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6

4. PAYX Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 17.30 indicates a rather expensive valuation of PAYX.
  • Based on the Price/Earnings ratio, PAYX is valued a bit cheaper than the industry average as 63.95% of the companies are valued more expensively.
  • PAYX's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.95.
  • Based on the Price/Forward Earnings ratio of 15.46, the valuation of PAYX can be described as correct.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of PAYX indicates a somewhat cheap valuation: PAYX is cheaper than 61.63% of the companies listed in the same industry.
  • The average S&P500 Price/Forward Earnings ratio is at 38.68. PAYX is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 17.3
Fwd PE 15.46
PAYX Price Earnings VS Forward Price EarningsPAYX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • 61.63% of the companies in the same industry are more expensive than PAYX, based on the Enterprise Value to EBITDA ratio.
  • PAYX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PAYX is cheaper than 61.63% of the companies in the same industry.
Industry RankSector Rank
P/FCF 16.19
EV/EBITDA 12.41
PAYX Per share dataPAYX EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5 10 15

4.3 Compensation for Growth

  • The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
  • PAYX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.38
PEG (5Y)1.61
EPS Next 2Y9.97%
EPS Next 3Y8.86%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. PAYX Dividend Analysis

5.1 Amount

  • PAYX has a Yearly Dividend Yield of 4.69%, which is a nice return.
  • PAYX's Dividend Yield is rather good when compared to the industry average which is at 1.77. PAYX pays more dividend than 91.86% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.81, PAYX pays a better dividend.
Industry RankSector Rank
Dividend Yield 4.69%

5.2 History

  • On average, the dividend of PAYX grows each year by 10.17%, which is quite nice.
  • PAYX has paid a dividend for at least 10 years, which is a reliable track record.
  • PAYX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.17%
Div Incr Years12
Div Non Decr Years12
PAYX Yearly Dividends per sharePAYX Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3 4

5.3 Sustainability

  • 94.97% of the earnings are spent on dividend by PAYX. This is not a sustainable payout ratio.
  • The dividend of PAYX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP94.97%
EPS Next 2Y9.97%
EPS Next 3Y8.86%
PAYX Yearly Income VS Free CF VS DividendPAYX Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B
PAYX Dividend Payout.PAYX Dividend Payout, showing the Payout Ratio.PAYX Dividend Payout.PayoutRetained Earnings

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PAYX Fundamentals: All Metrics, Ratios and Statistics

PAYCHEX INC

NASDAQ:PAYX (4/20/2026, 8:24:25 PM)

After market: 93.09 0 (0%)

93.09

+1.13 (+1.23%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)03-25
Earnings (Next)06-23
Inst Owners84.47%
Inst Owner Change-0.21%
Ins Owners10.32%
Ins Owner Change-2.8%
Market Cap33.35B
Revenue(TTM)6.33B
Net Income(TTM)1.64B
Analysts53.6
Price Target105.32 (13.14%)
Short Float %6.44%
Short Ratio4.7
Dividend
Industry RankSector Rank
Dividend Yield 4.69%
Yearly Dividend4.02
Dividend Growth(5Y)10.17%
DP94.97%
Div Incr Years12
Div Non Decr Years12
Ex-Date01-28
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.4%
Min EPS beat(2)0.26%
Max EPS beat(2)0.54%
EPS beat(4)2
Avg EPS beat(4)-0.5%
Min EPS beat(4)-1.94%
Max EPS beat(4)0.54%
EPS beat(8)3
Avg EPS beat(8)-0.52%
EPS beat(12)3
Avg EPS beat(12)-0.75%
EPS beat(16)6
Avg EPS beat(16)-0.06%
Revenue beat(2)0
Avg Revenue beat(2)-1.79%
Min Revenue beat(2)-2.65%
Max Revenue beat(2)-0.94%
Revenue beat(4)0
Avg Revenue beat(4)-1.99%
Min Revenue beat(4)-2.65%
Max Revenue beat(4)-0.94%
Revenue beat(8)0
Avg Revenue beat(8)-1.98%
Revenue beat(12)0
Avg Revenue beat(12)-2.12%
Revenue beat(16)1
Avg Revenue beat(16)-1.69%
PT rev (1m)-14.39%
PT rev (3m)-15.49%
EPS NQ rev (1m)-2.26%
EPS NQ rev (3m)-2.3%
EPS NY rev (1m)0.14%
EPS NY rev (3m)0.94%
Revenue NQ rev (1m)-0.97%
Revenue NQ rev (3m)-1.15%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)0.12%
Valuation
Industry RankSector Rank
PE 17.3
Fwd PE 15.46
P/S 5.27
P/FCF 16.19
P/OCF 14.38
P/B 8.31
P/tB N/A
EV/EBITDA 12.41
EPS(TTM)5.38
EY5.78%
EPS(NY)6.02
Fwd EY6.47%
FCF(TTM)5.75
FCFY6.18%
OCF(TTM)6.47
OCFY6.95%
SpS17.68
BVpS11.2
TBVpS-6.31
PEG (NY)1.38
PEG (5Y)1.61
Graham Number36.8241 (-60.44%)
Profitability
Industry RankSector Rank
ROA 9.35%
ROE 40.78%
ROCE 25.88%
ROIC 19.72%
ROICexc 24.19%
ROICexgc 120.47%
OM 39.36%
PM (TTM) 25.84%
GM 91.37%
FCFM 32.52%
ROA(3y)13.68%
ROA(5y)13.48%
ROE(3y)43.07%
ROE(5y)42.31%
ROIC(3y)28.05%
ROIC(5y)28.53%
ROICexc(3y)39.45%
ROICexc(5y)39.54%
ROICexgc(3y)122.07%
ROICexgc(5y)118.33%
ROCE(3y)36.92%
ROCE(5y)37.54%
ROICexgc growth 3Y-2.65%
ROICexgc growth 5Y2.68%
ROICexc growth 3Y-20.58%
ROICexc growth 5Y-8.53%
OM growth 3Y1.57%
OM growth 5Y2.95%
PM growth 3Y-0.51%
PM growth 5Y1.82%
GM growth 3Y-0.99%
GM growth 5Y-0.7%
F-Score5
Asset Turnover0.36
Health
Industry RankSector Rank
Debt/Equity 1.13
Debt/FCF 2.41
Debt/EBITDA 1.57
Cap/Depr 62.64%
Cap/Sales 4.1%
Interest Coverage 250
Cash Conversion 79.76%
Profit Quality 125.84%
Current Ratio 1.26
Quick Ratio 1.26
Altman-Z 2.6
F-Score5
WACC8.27%
ROIC/WACC2.38
Cap/Depr(3y)100.38%
Cap/Depr(5y)88.13%
Cap/Sales(3y)3.56%
Cap/Sales(5y)3.37%
Profit Quality(3y)100.66%
Profit Quality(5y)101.87%
High Growth Momentum
Growth
EPS 1Y (TTM)9.57%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%14.77%
EPS Next Y12.57%
EPS Next 2Y9.97%
EPS Next 3Y8.86%
EPS Next 5Y8.2%
Revenue 1Y (TTM)16.44%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%19.87%
Revenue Next Year17.06%
Revenue Next 2Y11.13%
Revenue Next 3Y9.21%
Revenue Next 5Y7.57%
EBIT growth 1Y7.72%
EBIT growth 3Y8.18%
EBIT growth 5Y9.79%
EBIT Next Year27.3%
EBIT Next 3Y13.82%
EBIT Next 5Y10.88%
FCF growth 1Y8.32%
FCF growth 3Y5.13%
FCF growth 5Y5.19%
OCF growth 1Y10.87%
OCF growth 3Y6.14%
OCF growth 5Y5.7%

PAYCHEX INC / PAYX Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for PAYCHEX INC?

ChartMill assigns a fundamental rating of 6 / 10 to PAYX.


What is the valuation status of PAYCHEX INC (PAYX) stock?

ChartMill assigns a valuation rating of 6 / 10 to PAYCHEX INC (PAYX). This can be considered as Fairly Valued.


Can you provide the profitability details for PAYCHEX INC?

PAYCHEX INC (PAYX) has a profitability rating of 9 / 10.


What is the financial health of PAYCHEX INC (PAYX) stock?

The financial health rating of PAYCHEX INC (PAYX) is 4 / 10.


Can you provide the expected EPS growth for PAYX stock?

The Earnings per Share (EPS) of PAYCHEX INC (PAYX) is expected to grow by 12.57% in the next year.