PAYCHEX INC (PAYX) Fundamental Analysis & Valuation

NASDAQ:PAYX • US7043261079

Current stock price

92.97 USD
-1.08 (-1.15%)
Last:

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.
  • In the past 5 years PAYX has always 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

  • PAYX's Return On Assets of 9.35% is fine compared to the rest of the industry. PAYX outperforms 78.82% of its industry peers.
  • PAYX has a better Return On Equity (40.78%) than 90.59% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 19.72%, PAYX belongs to the top of the industry, outperforming 89.41% of the companies in the same industry.
  • PAYX had an Average Return On Invested Capital over the past 3 years of 28.05%. This is significantly above the industry average of 12.34%.
  • 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 94.12% of its industry peers.
  • PAYX's Profit Margin has improved in the last couple of years.
  • PAYX has a better Operating Margin (39.36%) than 97.65% of its industry peers.
  • In the last couple of years the Operating Margin of PAYX has grown nicely.
  • PAYX has a Gross Margin of 91.37%. This is amongst the best in the industry. PAYX outperforms 97.65% of its industry peers.
  • 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.
  • The number of shares outstanding for PAYX has been increased compared to 5 years ago.
  • Compared to 1 year ago, PAYX has a worse debt to assets ratio.
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

  • PAYX has an Altman-Z score of 2.63. This is not the best score and indicates that PAYX is in the grey zone with still only limited risk for bankruptcy at the moment.
  • PAYX has a Altman-Z score (2.63) which is in line with its industry peers.
  • PAYX has a debt to FCF ratio of 2.41. This is a good value and a sign of high solvency as PAYX would need 2.41 years to pay back of all of its debts.
  • PAYX has a Debt to FCF ratio of 2.41. This is in the better half of the industry: PAYX outperforms 63.53% of its industry peers.
  • A Debt/Equity ratio of 1.13 is on the high side and indicates that PAYX has dependencies on debt financing.
  • PAYX has a Debt to Equity ratio of 1.13. This is in the lower half of the industry: PAYX underperforms 77.65% 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 2.63
ROIC/WACC2.34
WACC8.42%
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

  • PAYX has a Current 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.
  • Looking at the Current ratio, with a value of 1.26, PAYX is doing worse than 62.35% of the companies in the same industry.
  • A Quick Ratio of 1.26 indicates that PAYX should not have too much problems paying its short term obligations.
  • Looking at the Quick ratio, with a value of 1.26, PAYX is doing worse than 62.35% of the companies in the same industry.
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

4

3. PAYX Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an nice 9.57% over the past year.
  • The Earnings Per Share has been growing by 10.74% on average over the past years. This is quite good.
  • The Revenue has grown by 16.44% in the past year. This is quite good.
  • Measured over the past years, PAYX shows a small growth in Revenue. The Revenue has been growing by 6.64% on average per year.
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

  • Based on estimates for the next years, PAYX will show a small growth in Earnings Per Share. The EPS will grow by 7.32% on average per year.
  • The Revenue is expected to grow by 7.33% on average over the next years.
EPS Next Y12.57%
EPS Next 2Y9.97%
EPS Next 3Y8.86%
EPS Next 5Y7.32%
Revenue Next Year17.06%
Revenue Next 2Y11.13%
Revenue Next 3Y9.21%
Revenue Next 5Y7.33%

3.3 Evolution

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
  • 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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5

4. PAYX Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 17.28 indicates a rather expensive valuation of PAYX.
  • 61.18% of the companies in the same industry are more expensive than PAYX, based on the Price/Earnings ratio.
  • Compared to an average S&P500 Price/Earnings ratio of 26.54, PAYX is valued a bit cheaper.
  • The Price/Forward Earnings ratio is 15.44, which indicates a correct valuation of PAYX.
  • PAYX's Price/Forward Earnings ratio is in line with the industry average.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 21.68, PAYX is valued a bit cheaper.
Industry RankSector Rank
PE 17.28
Fwd PE 15.44
PAYX Price Earnings VS Forward Price EarningsPAYX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • PAYX's Enterprise Value to EBITDA is on the same level as the industry average.
  • PAYX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PAYX is cheaper than 61.18% of the companies in the same industry.
Industry RankSector Rank
P/FCF 16.17
EV/EBITDA 12.66
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

  • PAYX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
  • The excellent profitability rating of PAYX 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

  • With a Yearly Dividend Yield of 4.75%, PAYX is a good candidate for dividend investing.
  • PAYX's Dividend Yield is rather good when compared to the industry average which is at 1.74. PAYX pays more dividend than 91.76% of the companies in the same industry.
  • PAYX's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
Industry RankSector Rank
Dividend Yield 4.75%

5.2 History

  • The dividend of PAYX is nicely growing with an annual growth rate of 10.17%!
  • PAYX has been paying a dividend for at least 10 years, so it has 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 (4/30/2026, 3:02:05 PM)

92.97

-1.08 (-1.15%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Industry Strength14.91
Industry Growth34.78
Earnings (Last)03-25
Earnings (Next)06-23
Inst Owners84.47%
Inst Owner Change0.06%
Ins Owners10.32%
Ins Owner Change-1.99%
Market Cap33.31B
Revenue(TTM)6.33B
Net Income(TTM)1.64B
Analysts53.6
Price Target105.32 (13.28%)
Short Float %6.34%
Short Ratio4.97
Dividend
Industry RankSector Rank
Dividend Yield 4.75%
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)-2.31%
EPS NQ rev (3m)-2.3%
EPS NY rev (1m)0.14%
EPS NY rev (3m)0.11%
Revenue NQ rev (1m)-1.39%
Revenue NQ rev (3m)-1.09%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)0.12%
Valuation
Industry RankSector Rank
PE 17.28
Fwd PE 15.44
P/S 5.26
P/FCF 16.17
P/OCF 14.36
P/B 8.3
P/tB N/A
EV/EBITDA 12.66
EPS(TTM)5.38
EY5.79%
EPS(NY)6.02
Fwd EY6.48%
FCF(TTM)5.75
FCFY6.18%
OCF(TTM)6.47
OCFY6.96%
SpS17.68
BVpS11.2
TBVpS-6.31
PEG (NY)1.38
PEG (5Y)1.61
Graham Number36.8241 (-60.39%)
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 2.63
F-Score5
WACC8.42%
ROIC/WACC2.34
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 5Y7.32%
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 5Y7.33%
EBIT growth 1Y7.72%
EBIT growth 3Y8.18%
EBIT growth 5Y9.79%
EBIT Next Year27.3%
EBIT Next 3Y13.82%
EBIT Next 5Y9.99%
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 5 / 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.