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NYSE:PAYC—A High-Growth Stock Gearing Up for Its Next Upward Move.

By Mill Chart

Last update: Dec 1, 2023

In this article we will dive into PAYCOM SOFTWARE INC (NYSE:PAYC) as a possible candidate for growth investing. Investors should always do their own research, but we noticed PAYCOM SOFTWARE INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Growth Assessment of NYSE:PAYC

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:PAYC, the assigned 8 reflects its growth potential:

  • PAYC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.82%, which is quite impressive.
  • The Earnings Per Share has been growing by 36.29% on average over the past years. This is a very strong growth
  • Looking at the last year, PAYC shows a very strong growth in Revenue. The Revenue has grown by 26.36%.
  • The Revenue has been growing by 26.00% on average over the past years. This is a very strong growth!
  • Based on estimates for the next years, PAYC will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.84% on average per year.
  • Based on estimates for the next years, PAYC will show a quite strong growth in Revenue. The Revenue will grow by 19.39% on average per year.

Exploring NYSE:PAYC's Health

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:PAYC has achieved a 8 out of 10:

  • PAYC has an Altman-Z score of 4.18. This indicates that PAYC is financially healthy and has little risk of bankruptcy at the moment.
  • PAYC has a better Altman-Z score (4.18) than 76.92% of its industry peers.
  • The Debt to FCF ratio of PAYC is 0.10, which is an excellent value as it means it would take PAYC, only 0.10 years of fcf income to pay off all of its debts.
  • The Debt to FCF ratio of PAYC (0.10) is better than 83.33% of its industry peers.
  • PAYC has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
  • Looking at the Debt to Equity ratio, with a value of 0.02, PAYC is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
  • 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.

A Closer Look at Profitability for NYSE:PAYC

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:PAYC, the assigned 8 is a significant indicator of profitability:

  • With an excellent Return On Assets value of 8.79%, PAYC belongs to the best of the industry, outperforming 80.77% of the companies in the same industry.
  • PAYC has a Return On Equity of 23.85%. This is amongst the best in the industry. PAYC outperforms 82.05% of its industry peers.
  • With an excellent Return On Invested Capital value of 18.76%, PAYC belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
  • Measured over the past 3 years, the Average Return On Invested Capital for PAYC is above the industry average of 12.14%.
  • The 3 year average ROIC (16.48%) for PAYC is below the current ROIC(18.76%), indicating increased profibility in the last year.
  • The Profit Margin of PAYC (20.80%) is better than 92.31% of its industry peers.
  • PAYC has a Operating Margin of 27.64%. This is amongst the best in the industry. PAYC outperforms 92.31% of its industry peers.
  • The Gross Margin of PAYC (84.01%) is better than 93.59% of its industry peers.

How do we evaluate the setup for NYSE:PAYC?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:PAYC currently has a 7 as setup rating:

PAYC has a bad technical rating, but it does show a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 181.67. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 180.60, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

Our latest full fundamental report of PAYC contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of PAYC

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.

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PAYCOM SOFTWARE INC

NYSE:PAYC (2/26/2024, 7:04:00 PM)

After market: 180.3 +0.22 (+0.12%)

180.08

-4.59 (-2.49%)

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