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PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis

NYSE:PAYC - New York Stock Exchange, Inc. - US70432V1026 - Common Stock - Currency: USD

224.72  +1.48 (+0.66%)

After market: 224.72 0 (0%)

Fundamental Rating

7

Overall PAYC gets a fundamental rating of 7 out of 10. We evaluated PAYC against 82 industry peers in the Professional Services industry. Both the health and profitability get an excellent rating, making PAYC a very profitable company, without any liquidiy or solvency issues. PAYC is quite expensive at the moment. It does show a decent growth rate. These ratings could make PAYC a good candidate for quality investing.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

In the past year PAYC was profitable.
In the past year PAYC had a positive cash flow from operations.
Each year in the past 5 years PAYC has been profitable.
In the past 5 years PAYC always reported a positive cash flow from operatings.
PAYC Yearly Net Income VS EBIT VS OCF VS FCFPAYC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M

1.2 Ratios

With a decent Return On Assets value of 8.62%, PAYC is doing good in the industry, outperforming 78.05% of the companies in the same industry.
PAYC has a Return On Equity of 22.96%. This is in the better half of the industry: PAYC outperforms 74.39% of its industry peers.
PAYC has a Return On Invested Capital of 19.08%. This is amongst the best in the industry. PAYC outperforms 90.24% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PAYC is significantly above the industry average of 12.28%.
Industry RankSector Rank
ROA 8.62%
ROE 22.96%
ROIC 19.08%
ROA(3y)7.97%
ROA(5y)7.1%
ROE(3y)27.27%
ROE(5y)25.12%
ROIC(3y)21.04%
ROIC(5y)18.84%
PAYC Yearly ROA, ROE, ROICPAYC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40 50

1.3 Margins

The Profit Margin of PAYC (20.60%) is better than 92.68% of its industry peers.
PAYC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 27.88%, PAYC belongs to the best of the industry, outperforming 92.68% of the companies in the same industry.
In the last couple of years the Operating Margin of PAYC has grown nicely.
With an excellent Gross Margin value of 82.20%, PAYC belongs to the best of the industry, outperforming 91.46% of the companies in the same industry.
PAYC's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 27.88%
PM (TTM) 20.6%
GM 82.2%
OM growth 3Y11.92%
OM growth 5Y1.9%
PM growth 3Y12.81%
PM growth 5Y1.73%
GM growth 3Y-0.97%
GM growth 5Y-0.69%
PAYC Yearly Profit, Operating, Gross MarginsPAYC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

9

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PAYC is creating value.
Compared to 1 year ago, PAYC has less shares outstanding
The number of shares outstanding for PAYC has been reduced compared to 5 years ago.
There is no outstanding debt for PAYC. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
PAYC Yearly Shares OutstandingPAYC Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10M 20M 30M 40M 50M
PAYC Yearly Total Debt VS Total AssetsPAYC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B 5B

2.2 Solvency

An Altman-Z score of 4.18 indicates that PAYC is not in any danger for bankruptcy at the moment.
PAYC has a Altman-Z score of 4.18. This is in the better half of the industry: PAYC outperforms 71.95% of its industry peers.
There is no outstanding debt for PAYC. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z 4.18
ROIC/WACC2.1
WACC9.1%
PAYC Yearly LT Debt VS Equity VS FCFPAYC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

2.3 Liquidity

A Current Ratio of 1.20 indicates that PAYC should not have too much problems paying its short term obligations.
PAYC has a Current ratio of 1.20. This is comparable to the rest of the industry: PAYC outperforms 40.24% of its industry peers.
PAYC has a Quick Ratio of 1.20. This is a normal value and indicates that PAYC is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of PAYC (1.20) is worse than 60.98% of its industry peers.
The current and quick ratio evaluation for PAYC is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
Industry RankSector Rank
Current Ratio 1.2
Quick Ratio 1.2
PAYC Yearly Current Assets VS Current LiabilitesPAYC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B

6

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 6.32% over the past year.
The Earnings Per Share has been growing by 18.56% on average over the past years. This is quite good.
PAYC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.87%.
Measured over the past years, PAYC shows a very strong growth in Revenue. The Revenue has been growing by 20.62% on average per year.
EPS 1Y (TTM)6.32%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%8.11%
Revenue 1Y (TTM)9.87%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%6.13%

3.2 Future

Based on estimates for the next years, PAYC will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.40% on average per year.
Based on estimates for the next years, PAYC will show a small growth in Revenue. The Revenue will grow by 7.06% on average per year.
EPS Next Y11.58%
EPS Next 2Y11.2%
EPS Next 3Y12.59%
EPS Next 5Y12.4%
Revenue Next Year8.6%
Revenue Next 2Y8.91%
Revenue Next 3Y9.54%
Revenue Next 5Y7.06%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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 decreasing.
PAYC Yearly Revenue VS EstimatesPAYC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 1B 2B 3B
PAYC Yearly EPS VS EstimatesPAYC Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5 10 15

3

4. Valuation

4.1 Price/Earnings Ratio

PAYC is valuated quite expensively with a Price/Earnings ratio of 26.72.
The rest of the industry has a similar Price/Earnings ratio as PAYC.
PAYC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.48.
A Price/Forward Earnings ratio of 22.16 indicates a rather expensive valuation of PAYC.
PAYC's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of PAYC to the average of the S&P500 Index (36.52), we can say PAYC is valued slightly cheaper.
Industry RankSector Rank
PE 26.72
Fwd PE 22.16
PAYC Price Earnings VS Forward Price EarningsPAYC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as PAYC.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PAYC is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 33.09
EV/EBITDA 17.45
PAYC Per share dataPAYC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PAYC has an outstanding profitability rating, which may justify a higher PE ratio.
PAYC's earnings are expected to grow with 12.59% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.31
PEG (5Y)1.44
EPS Next 2Y11.2%
EPS Next 3Y12.59%

3

5. Dividend

5.1 Amount

PAYC has a yearly dividend return of 0.65%, which is pretty low.
PAYC's Dividend Yield is a higher than the industry average which is at 2.06.
Compared to an average S&P500 Dividend Yield of 2.34, PAYC's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.65%

5.2 History

PAYC has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
PAYC Yearly Dividends per sharePAYC Yearly Dividends per shareYearly Dividends per share 2023 2024 2025 0.5 1 1.5

5.3 Sustainability

21.48% of the earnings are spent on dividend by PAYC. This is a low number and sustainable payout ratio.
DP21.48%
EPS Next 2Y11.2%
EPS Next 3Y12.59%
PAYC Yearly Income VS Free CF VS DividendPAYC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M 500M
PAYC Dividend Payout.PAYC Dividend Payout, showing the Payout Ratio.PAYC Dividend Payout.PayoutRetained Earnings

PAYCOM SOFTWARE INC

NYSE:PAYC (7/17/2025, 8:04:00 PM)

After market: 224.72 0 (0%)

224.72

+1.48 (+0.66%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)05-07 2025-05-07/amc
Earnings (Next)08-05 2025-08-05/amc
Inst Owners92%
Inst Owner Change-0.02%
Ins Owners5.18%
Ins Owner Change0.5%
Market Cap12.59B
Analysts69.6
Price Target250.31 (11.39%)
Short Float %4.57%
Short Ratio3.67
Dividend
Industry RankSector Rank
Dividend Yield 0.65%
Yearly Dividend1.51
Dividend Growth(5Y)N/A
DP21.48%
Div Incr Years1
Div Non Decr Years1
Ex-Date05-27 2025-05-27 (0.375)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.34%
Min EPS beat(2)7.08%
Max EPS beat(2)15.6%
EPS beat(4)3
Avg EPS beat(4)5.95%
Min EPS beat(4)-0.71%
Max EPS beat(4)15.6%
EPS beat(8)6
Avg EPS beat(8)5.16%
EPS beat(12)10
Avg EPS beat(12)6.12%
EPS beat(16)13
Avg EPS beat(16)5.86%
Revenue beat(2)1
Avg Revenue beat(2)-0.26%
Min Revenue beat(2)-1.22%
Max Revenue beat(2)0.69%
Revenue beat(4)1
Avg Revenue beat(4)-0.78%
Min Revenue beat(4)-1.72%
Max Revenue beat(4)0.69%
Revenue beat(8)2
Avg Revenue beat(8)-0.97%
Revenue beat(12)4
Avg Revenue beat(12)-0.7%
Revenue beat(16)8
Avg Revenue beat(16)-0.21%
PT rev (1m)0.25%
PT rev (3m)7.79%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)0.56%
EPS NY rev (1m)0.37%
EPS NY rev (3m)3.15%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-0.07%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.24%
Valuation
Industry RankSector Rank
PE 26.72
Fwd PE 22.16
P/S 6.58
P/FCF 33.09
P/OCF 22.17
P/B 7.33
P/tB 7.77
EV/EBITDA 17.45
EPS(TTM)8.41
EY3.74%
EPS(NY)10.14
Fwd EY4.51%
FCF(TTM)6.79
FCFY3.02%
OCF(TTM)10.14
OCFY4.51%
SpS34.16
BVpS30.65
TBVpS28.92
PEG (NY)2.31
PEG (5Y)1.44
Profitability
Industry RankSector Rank
ROA 8.62%
ROE 22.96%
ROCE 25.53%
ROIC 19.08%
ROICexc 25.41%
ROICexgc 27.09%
OM 27.88%
PM (TTM) 20.6%
GM 82.2%
FCFM 19.88%
ROA(3y)7.97%
ROA(5y)7.1%
ROE(3y)27.27%
ROE(5y)25.12%
ROIC(3y)21.04%
ROIC(5y)18.84%
ROICexc(3y)26.79%
ROICexc(5y)23.85%
ROICexgc(3y)29.01%
ROICexgc(5y)25.99%
ROCE(3y)28.15%
ROCE(5y)25.21%
ROICexcg growth 3Y12.94%
ROICexcg growth 5Y1.1%
ROICexc growth 3Y15.14%
ROICexc growth 5Y1.63%
OM growth 3Y11.92%
OM growth 5Y1.9%
PM growth 3Y12.81%
PM growth 5Y1.73%
GM growth 3Y-0.97%
GM growth 5Y-0.69%
F-Score6
Asset Turnover0.42
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Debt/EBITDA 0
Cap/Depr 122.14%
Cap/Sales 9.79%
Interest Coverage 250
Cash Conversion 82.65%
Profit Quality 96.52%
Current Ratio 1.2
Quick Ratio 1.2
Altman-Z 4.18
F-Score6
WACC9.1%
ROIC/WACC2.1
Cap/Depr(3y)151.85%
Cap/Depr(5y)163.91%
Cap/Sales(3y)10.68%
Cap/Sales(5y)11.04%
Profit Quality(3y)77.58%
Profit Quality(5y)84.82%
High Growth Momentum
Growth
EPS 1Y (TTM)6.32%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%8.11%
EPS Next Y11.58%
EPS Next 2Y11.2%
EPS Next 3Y12.59%
EPS Next 5Y12.4%
Revenue 1Y (TTM)9.87%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%6.13%
Revenue Next Year8.6%
Revenue Next 2Y8.91%
Revenue Next 3Y9.54%
Revenue Next 5Y7.06%
EBIT growth 1Y-7.48%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year44.32%
EBIT Next 3Y21.91%
EBIT Next 5Y15.57%
FCF growth 1Y51.53%
FCF growth 3Y20.33%
FCF growth 5Y20.7%
OCF growth 1Y44.1%
OCF growth 3Y18.68%
OCF growth 5Y18.94%