PAYCHEX INC (PAYX) Fundamental Analysis & Valuation

NASDAQ:PAYX • US7043261079

Current stock price

93.36 USD
+2.75 (+3.03%)
At close:
93.56 USD
+0.2 (+0.21%)
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.
  • PAYX had positive earnings in each of the past 5 years.
  • 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 9.66% is amongst the best of the industry. PAYX outperforms 80.46% of its industry peers.
  • The Return On Equity of PAYX (41.13%) is better than 91.95% of its industry peers.
  • The Return On Invested Capital of PAYX (19.25%) is better than 86.21% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for PAYX is significantly above the industry average of 12.57%.
  • The last Return On Invested Capital (19.25%) for PAYX is well below the 3 year average (28.05%), which needs to be investigated, but indicates that PAYX had better years and this may not be a problem.
Industry RankSector Rank
ROA 9.66%
ROE 41.13%
ROIC 19.25%
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 (26.45%) than 94.25% of its industry peers.
  • PAYX's Profit Margin has improved in the last couple of years.
  • PAYX has a Operating Margin of 39.76%. This is amongst the best in the industry. PAYX outperforms 97.70% of its industry peers.
  • In the last couple of years the Operating Margin of PAYX has grown nicely.
  • Looking at the Gross Margin, with a value of 91.14%, PAYX belongs to the top of the industry, outperforming 97.70% of the companies in the same industry.
  • PAYX's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 39.76%
PM (TTM) 26.45%
GM 91.14%
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

  • PAYX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
  • Compared to 1 year ago, PAYX has about the same amount of shares outstanding.
  • PAYX has more shares outstanding than it did 5 years ago.
  • The debt/assets ratio for PAYX is higher compared to a year ago.
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 2.69. 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 of 2.69. This is comparable to the rest of the industry: PAYX outperforms 54.02% of its industry peers.
  • PAYX has a debt to FCF ratio of 2.53. This is a good value and a sign of high solvency as PAYX would need 2.53 years to pay back of all of its debts.
  • PAYX has a Debt to FCF ratio of 2.53. This is in the better half of the industry: PAYX outperforms 66.67% of its industry peers.
  • A Debt/Equity ratio of 1.18 is on the high side and indicates that PAYX has dependencies on debt financing.
  • With a Debt to Equity ratio value of 1.18, PAYX is not doing good in the industry: 74.71% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 1.18
Debt/FCF 2.53
Altman-Z 2.69
ROIC/WACC2.29
WACC8.39%
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 1.27 indicates that PAYX should not have too much problems paying its short term obligations.
  • Looking at the Current ratio, with a value of 1.27, PAYX is doing worse than 60.92% of the companies in the same industry.
  • A Quick Ratio of 1.27 indicates that PAYX should not have too much problems paying its short term obligations.
  • PAYX has a Quick ratio of 1.27. This is in the lower half of the industry: PAYX underperforms 60.92% of its industry peers.
Industry RankSector Rank
Current Ratio 1.27
Quick Ratio 1.27
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

  • PAYX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.50%.
  • The Earnings Per Share has been growing by 10.74% on average over the past years. This is quite good.
  • PAYX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.37%.
  • The Revenue has been growing slightly by 6.64% on average over the past years.
EPS 1Y (TTM)7.5%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%10.53%
Revenue 1Y (TTM)12.37%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%18.28%

3.2 Future

  • Based on estimates for the next years, PAYX will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.20% on average per year.
  • PAYX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.57% yearly.
EPS Next Y12.41%
EPS Next 2Y10.01%
EPS Next 3Y8.91%
EPS Next 5Y8.2%
Revenue Next Year16.9%
Revenue Next 2Y11.26%
Revenue Next 3Y9.42%
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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4

4. PAYX Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 18.09, the valuation of PAYX can be described as rather expensive.
  • The rest of the industry has a similar Price/Earnings ratio as PAYX.
  • The average S&P500 Price/Earnings ratio is at 25.61. PAYX is valued slightly cheaper when compared to this.
  • With a Price/Forward Earnings ratio of 15.49, PAYX is valued correctly.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of PAYX is on the same level as its industry peers.
  • PAYX's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.79.
Industry RankSector Rank
PE 18.09
Fwd PE 15.49
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

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PAYX is on the same level as its industry peers.
  • PAYX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PAYX is cheaper than 64.37% of the companies in the same industry.
Industry RankSector Rank
P/FCF 17.08
EV/EBITDA 13.08
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)1.46
PEG (5Y)1.68
EPS Next 2Y10.01%
EPS Next 3Y8.91%

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7

5. PAYX Dividend Analysis

5.1 Amount

  • PAYX has a Yearly Dividend Yield of 4.71%, which is a nice return.
  • Compared to an average industry Dividend Yield of 1.79, PAYX pays a better dividend. On top of this PAYX pays more dividend than 90.80% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.89, PAYX pays a better dividend.
Industry RankSector Rank
Dividend Yield 4.71%

5.2 History

  • On average, the dividend of PAYX grows each year by 10.17%, which is quite nice.
  • 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 Years11
Div Non Decr Years11
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

  • PAYX pays out 95.21% of its income as dividend. This is not a sustainable payout ratio.
  • PAYX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP95.21%
EPS Next 2Y10.01%
EPS Next 3Y8.91%
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 (3/25/2026, 7:51:38 PM)

After market: 93.56 +0.2 (+0.21%)

93.36

+2.75 (+3.03%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)03-25
Earnings (Next)N/A
Inst Owners84.56%
Inst Owner Change4.95%
Ins Owners10.31%
Ins Owner Change-2.84%
Market Cap33.51B
Revenue(TTM)6.03B
Net Income(TTM)1.60B
Analysts53.91
Price Target123.02 (31.77%)
Short Float %6.22%
Short Ratio5.23
Dividend
Industry RankSector Rank
Dividend Yield 4.71%
Yearly Dividend4.02
Dividend Growth(5Y)10.17%
DP95.21%
Div Incr Years11
Div Non Decr Years11
Ex-Date01-28
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.15%
Min EPS beat(2)-0.85%
Max EPS beat(2)0.54%
EPS beat(4)1
Avg EPS beat(4)-0.88%
Min EPS beat(4)-1.94%
Max EPS beat(4)0.54%
EPS beat(8)2
Avg EPS beat(8)-0.69%
EPS beat(12)3
Avg EPS beat(12)-0.63%
EPS beat(16)6
Avg EPS beat(16)0.4%
Revenue beat(2)0
Avg Revenue beat(2)-2.25%
Min Revenue beat(2)-2.65%
Max Revenue beat(2)-1.85%
Revenue beat(4)0
Avg Revenue beat(4)-2.37%
Min Revenue beat(4)-2.65%
Max Revenue beat(4)-1.85%
Revenue beat(8)0
Avg Revenue beat(8)-2.26%
Revenue beat(12)0
Avg Revenue beat(12)-2.09%
Revenue beat(16)2
Avg Revenue beat(16)-1.47%
PT rev (1m)-0.71%
PT rev (3m)-2.59%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.4%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)0.37%
Revenue NQ rev (1m)0.44%
Revenue NQ rev (3m)-1.08%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-0.44%
Valuation
Industry RankSector Rank
PE 18.09
Fwd PE 15.49
P/S 5.55
P/FCF 17.08
P/OCF 15.08
P/B 8.64
P/tB N/A
EV/EBITDA 13.08
EPS(TTM)5.16
EY5.53%
EPS(NY)6.03
Fwd EY6.46%
FCF(TTM)5.46
FCFY5.85%
OCF(TTM)6.19
OCFY6.63%
SpS16.81
BVpS10.81
TBVpS-6.85
PEG (NY)1.46
PEG (5Y)1.68
Graham Number35.42
Profitability
Industry RankSector Rank
ROA 9.66%
ROE 41.13%
ROCE 25.31%
ROIC 19.25%
ROICexc 22.93%
ROICexgc 111.92%
OM 39.76%
PM (TTM) 26.45%
GM 91.14%
FCFM 32.51%
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 Turnover0.37
Health
Industry RankSector Rank
Debt/Equity 1.18
Debt/FCF 2.53
Debt/EBITDA 1.66
Cap/Depr 75.29%
Cap/Sales 4.33%
Interest Coverage 250
Cash Conversion 80.95%
Profit Quality 122.94%
Current Ratio 1.27
Quick Ratio 1.27
Altman-Z 2.69
F-Score5
WACC8.39%
ROIC/WACC2.29
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)7.5%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%10.53%
EPS Next Y12.41%
EPS Next 2Y10.01%
EPS Next 3Y8.91%
EPS Next 5Y8.2%
Revenue 1Y (TTM)12.37%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%18.28%
Revenue Next Year16.9%
Revenue Next 2Y11.26%
Revenue Next 3Y9.42%
Revenue Next 5Y7.57%
EBIT growth 1Y6.35%
EBIT growth 3Y8.18%
EBIT growth 5Y9.79%
EBIT Next Year28.83%
EBIT Next 3Y13.69%
EBIT Next 5Y10.88%
FCF growth 1Y8.26%
FCF growth 3Y5.13%
FCF growth 5Y5.19%
OCF growth 1Y11.67%
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 4 / 10 to PAYCHEX INC (PAYX). This can be considered as Fairly Valued.


What is the profitability of PAYX stock?

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


Can you provide the PE and PB ratios for PAYX stock?

The Price/Earnings (PE) ratio for PAYCHEX INC (PAYX) is 18.09 and the Price/Book (PB) ratio is 8.64.


How financially healthy is PAYCHEX INC?

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