PAYCHEX INC (PAYX) Fundamental Analysis & Valuation

NASDAQ:PAYX • US7043261079

Current stock price

92.18 USD
+0.33 (+0.36%)
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

  • In the past year PAYX was profitable.
  • In the past year PAYX had a positive cash flow from operations.
  • Each year in the past 5 years PAYX has been profitable.
  • Each year in the past 5 years PAYX had a positive operating cash flow.
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

  • With a decent Return On Assets value of 9.35%, PAYX is doing good in the industry, outperforming 77.91% of the companies in the same industry.
  • PAYX's Return On Equity of 40.78% is amongst the best of the industry. PAYX outperforms 90.70% of its industry peers.
  • The Return On Invested Capital of PAYX (19.72%) is better than 88.37% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for PAYX is significantly above the industry average of 13.10%.
  • 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.
  • The Operating Margin of PAYX (39.36%) is better than 97.67% of its industry peers.
  • In the last couple of years the Operating Margin of PAYX has grown nicely.
  • With an excellent Gross Margin value of 91.37%, PAYX belongs to the best of the industry, outperforming 97.67% of the companies in the same industry.
  • PAYX's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 39.36%
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

  • The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PAYX is creating value.
  • The number of shares outstanding for PAYX remains at a similar level compared to 1 year ago.
  • PAYX has more shares outstanding than it did 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

  • 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.
  • Looking at the Altman-Z score, with a value of 2.60, PAYX is in line with its industry, outperforming 51.16% of the companies in the same industry.
  • 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.
  • The Debt to FCF ratio of PAYX (2.41) is better than 65.12% 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.
  • The Debt to Equity ratio of PAYX (1.13) is worse than 75.58% 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/WACC2.36
WACC8.34%
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.
  • PAYX's Current 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.
  • A Quick Ratio of 1.26 indicates that PAYX should not have too much problems paying its short term obligations.
  • PAYX has a Quick ratio of 1.26. This is in the lower half of the industry: PAYX underperforms 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

  • The Earnings Per Share has grown by an nice 9.57% over the past year.
  • PAYX shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.74% yearly.
  • Looking at the last year, PAYX shows a quite strong growth in Revenue. The Revenue has grown by 16.44% in the last year.
  • The Revenue has been growing slightly by 6.64% on average over the past years.
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 quite strong growth in Earnings Per Share. The EPS will grow by 8.20% on average per year.
  • 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 Y12.41%
EPS Next 2Y10.01%
EPS Next 3Y8.91%
EPS Next 5Y8.2%
Revenue Next Year17.06%
Revenue Next 2Y11.14%
Revenue Next 3Y9.22%
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.
  • The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
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

  • With a Price/Earnings ratio of 17.13, PAYX is valued on the expensive side.
  • Based on the Price/Earnings ratio, PAYX is valued a bit cheaper than the industry average as 60.47% of the companies are valued more expensively.
  • Compared to an average S&P500 Price/Earnings ratio of 26.21, PAYX is valued a bit cheaper.
  • A Price/Forward Earnings ratio of 15.29 indicates a correct valuation of PAYX.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of PAYX indicates a somewhat cheap valuation: PAYX is cheaper than 60.47% of the companies listed in the same industry.
  • PAYX is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.13, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 17.13
Fwd PE 15.29
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.
  • Based on the Price/Free Cash Flow ratio, PAYX is valued a bit cheaper than the industry average as 63.95% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 16.07
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

  • 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)1.6
EPS Next 2Y10.01%
EPS Next 3Y8.91%

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7

5. PAYX Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 4.71%, PAYX is a good candidate for dividend investing.
  • Compared to an average industry Dividend Yield of 1.86, PAYX pays a better dividend. On top of this PAYX pays more dividend than 90.70% of the companies listed in the same industry.
  • PAYX's Dividend Yield is rather good when compared to the S&P500 average which is at 1.89.
Industry RankSector Rank
Dividend Yield 4.71%

5.2 History

  • The dividend of PAYX is nicely growing with an annual growth rate of 10.17%!
  • 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

  • PAYX pays out 94.97% of its income as dividend. 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 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 (4/7/2026, 12:23:07 PM)

92.18

+0.33 (+0.36%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)03-25
Earnings (Next)06-23
Inst Owners84.56%
Inst Owner Change-0.01%
Ins Owners10.31%
Ins Owner Change-2.8%
Market Cap33.09B
Revenue(TTM)6.33B
Net Income(TTM)1.64B
Analysts53.6
Price Target115.37 (25.16%)
Short Float %6.49%
Short Ratio4.78
Dividend
Industry RankSector Rank
Dividend Yield 4.71%
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)-6.22%
PT rev (3m)-8.65%
EPS NQ rev (1m)-2.17%
EPS NQ rev (3m)-1.98%
EPS NY rev (1m)0%
EPS NY rev (3m)0.8%
Revenue NQ rev (1m)-0.55%
Revenue NQ rev (3m)-0.85%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)-0.14%
Valuation
Industry RankSector Rank
PE 17.13
Fwd PE 15.29
P/S 5.22
P/FCF 16.07
P/OCF 14.27
P/B 8.24
P/tB N/A
EV/EBITDA 12.41
EPS(TTM)5.38
EY5.84%
EPS(NY)6.03
Fwd EY6.54%
FCF(TTM)5.74
FCFY6.22%
OCF(TTM)6.46
OCFY7.01%
SpS17.64
BVpS11.18
TBVpS-6.3
PEG (NY)1.38
PEG (5Y)1.6
Graham Number36.79
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
WACC8.34%
ROIC/WACC2.36
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 Y12.41%
EPS Next 2Y10.01%
EPS Next 3Y8.91%
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 2Y11.14%
Revenue Next 3Y9.22%
Revenue Next 5Y7.57%
EBIT growth 1Y7.72%
EBIT growth 3Y8.18%
EBIT growth 5Y9.79%
EBIT Next Year28.83%
EBIT Next 3Y13.69%
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 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 12.41% in the next year.