PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
USA - NYSE:PAYC - US70432V1026 - Common Stock
199.51 USD
-0.74 (-0.37%)
199.51 USD
0 (0%)
Overall PAYC gets a fundamental rating of 7 out of 10. We evaluated PAYC against 86 industry peers in the Professional Services industry. PAYC scores excellent points on both the profitability and health parts. This is a solid base for a good stock. PAYC is not priced too expensively while it is growing strongly. Keep and eye on this one! This makes PAYC very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
PAYC had positive earnings in the past year.
In the past year PAYC had a positive cash flow from operations.
PAYC had positive earnings in each of the past 5 years.
PAYC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.31%, PAYC belongs to the top of the industry, outperforming 84.88% of the companies in the same industry.
Looking at the Return On Equity, with a value of 23.07%, PAYC is in the better half of the industry, outperforming 75.58% of the companies in the same industry.
PAYC has a better Return On Invested Capital (18.87%) than 89.53% of its industry peers.
PAYC had an Average Return On Invested Capital over the past 3 years of 21.04%. This is significantly above the industry average of 13.28%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.31% | ||
| ROE | 23.07% | ||
| ROIC | 18.87% |
ROA(3y)7.97%
ROA(5y)7.1%
ROE(3y)27.27%
ROE(5y)25.12%
ROIC(3y)21.04%
ROIC(5y)18.84%
1.3 Margins
Looking at the Profit Margin, with a value of 21.21%, PAYC belongs to the top of the industry, outperforming 93.02% of the companies in the same industry.
PAYC's Profit Margin has improved in the last couple of years.
PAYC has a Operating Margin of 28.10%. This is amongst the best in the industry. PAYC outperforms 95.35% of its industry peers.
PAYC's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 82.44%, PAYC belongs to the best of the industry, outperforming 91.86% of the companies in the same industry.
PAYC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.1% | ||
| PM (TTM) | 21.21% | ||
| GM | 82.44% |
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%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PAYC is creating value.
The number of shares outstanding for PAYC has been reduced compared to 1 year ago.
Compared to 5 years ago, PAYC has less shares outstanding
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.
2.2 Solvency
An Altman-Z score of 4.85 indicates that PAYC is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.85, PAYC belongs to the best of the industry, outperforming 82.56% of the companies in the same industry.
PAYC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 4.85 |
ROIC/WACC2.18
WACC8.66%
2.3 Liquidity
A Current Ratio of 1.30 indicates that PAYC should not have too much problems paying its short term obligations.
PAYC's Current ratio of 1.30 is in line compared to the rest of the industry. PAYC outperforms 44.19% of its industry peers.
PAYC has a Quick Ratio of 1.30. This is a normal value and indicates that PAYC is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.30, PAYC perfoms like the industry average, outperforming 44.19% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.3 |
3. Growth
3.1 Past
PAYC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.88%, which is quite good.
The Earnings Per Share has been growing by 18.56% on average over the past years. This is quite good.
The Revenue has grown by 10.21% in the past year. This is quite good.
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)11.88%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%27.16%
Revenue 1Y (TTM)10.21%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%10.53%
3.2 Future
PAYC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.55% yearly.
Based on estimates for the next years, PAYC will show a quite strong growth in Revenue. The Revenue will grow by 8.57% on average per year.
EPS Next Y15.52%
EPS Next 2Y12.35%
EPS Next 3Y12.35%
EPS Next 5Y12.55%
Revenue Next Year9.54%
Revenue Next 2Y9.34%
Revenue Next 3Y9.63%
Revenue Next 5Y8.57%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 22.54, the valuation of PAYC can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of PAYC is on the same level as its industry peers.
PAYC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.91.
A Price/Forward Earnings ratio of 19.28 indicates a rather expensive valuation of PAYC.
PAYC's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.92. PAYC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.54 | ||
| Fwd PE | 19.28 |
4.2 Price Multiples
61.63% of the companies in the same industry are more expensive than PAYC, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as PAYC.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.64 | ||
| EV/EBITDA | 15.11 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PAYC has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as PAYC's earnings are expected to grow with 12.35% in the coming years.
PEG (NY)1.45
PEG (5Y)1.21
EPS Next 2Y12.35%
EPS Next 3Y12.35%
5. Dividend
5.1 Amount
PAYC has a yearly dividend return of 0.75%, which is pretty low.
Compared to an average industry Dividend Yield of 3.86, PAYC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, PAYC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
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
5.3 Sustainability
20.52% of the earnings are spent on dividend by PAYC. This is a low number and sustainable payout ratio.
DP20.52%
EPS Next 2Y12.35%
EPS Next 3Y12.35%
199.51
-0.74 (-0.37%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners92.08%
Inst Owner Change-0.04%
Ins Owners5.28%
Ins Owner Change0.04%
Market Cap11.22B
Revenue(TTM)1.96B
Net Income(TTM)415.74M
Analysts71.11
Price Target255.28 (27.95%)
Short Float %5.1%
Short Ratio3.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Yearly Dividend1.51
Dividend Growth(5Y)N/A
DP20.52%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.15%
Min EPS beat(2)7.08%
Max EPS beat(2)13.21%
EPS beat(4)4
Avg EPS beat(4)9.43%
Min EPS beat(4)1.82%
Max EPS beat(4)15.6%
EPS beat(8)7
Avg EPS beat(8)6.85%
EPS beat(12)10
Avg EPS beat(12)6.35%
EPS beat(16)13
Avg EPS beat(16)5.83%
Revenue beat(2)1
Avg Revenue beat(2)-0.38%
Min Revenue beat(2)-1.22%
Max Revenue beat(2)0.45%
Revenue beat(4)2
Avg Revenue beat(4)-0.24%
Min Revenue beat(4)-1.22%
Max Revenue beat(4)0.69%
Revenue beat(8)3
Avg Revenue beat(8)-0.76%
Revenue beat(12)4
Avg Revenue beat(12)-0.71%
Revenue beat(16)8
Avg Revenue beat(16)-0.32%
PT rev (1m)0.19%
PT rev (3m)1.86%
EPS NQ rev (1m)-0.39%
EPS NQ rev (3m)2.12%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)3.54%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.54 | ||
| Fwd PE | 19.28 | ||
| P/S | 5.73 | ||
| P/FCF | 31.64 | ||
| P/OCF | 20.11 | ||
| P/B | 6.23 | ||
| P/tB | 6.58 | ||
| EV/EBITDA | 15.11 |
EPS(TTM)8.85
EY4.44%
EPS(NY)10.35
Fwd EY5.19%
FCF(TTM)6.31
FCFY3.16%
OCF(TTM)9.92
OCFY4.97%
SpS34.84
BVpS32.03
TBVpS30.32
PEG (NY)1.45
PEG (5Y)1.21
Graham Number79.86
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.31% | ||
| ROE | 23.07% | ||
| ROCE | 25.24% | ||
| ROIC | 18.87% | ||
| ROICexc | 24.95% | ||
| ROICexgc | 26.5% | ||
| OM | 28.1% | ||
| PM (TTM) | 21.21% | ||
| GM | 82.44% | ||
| FCFM | 18.1% |
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%
ROICexgc growth 3Y12.94%
ROICexgc 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-Score7
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 127.33% | ||
| Cap/Sales | 10.38% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.56% | ||
| Profit Quality | 85.34% | ||
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.3 | ||
| Altman-Z | 4.85 |
F-Score7
WACC8.66%
ROIC/WACC2.18
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)11.88%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%27.16%
EPS Next Y15.52%
EPS Next 2Y12.35%
EPS Next 3Y12.35%
EPS Next 5Y12.55%
Revenue 1Y (TTM)10.21%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%10.53%
Revenue Next Year9.54%
Revenue Next 2Y9.34%
Revenue Next 3Y9.63%
Revenue Next 5Y8.57%
EBIT growth 1Y-5.78%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year48.63%
EBIT Next 3Y22.25%
EBIT Next 5Y15.74%
FCF growth 1Y20.03%
FCF growth 3Y20.33%
FCF growth 5Y20.7%
OCF growth 1Y24.56%
OCF growth 3Y18.68%
OCF growth 5Y18.94%
PAYCOM SOFTWARE INC / PAYC FAQ
What is the ChartMill fundamental rating of PAYCOM SOFTWARE INC (PAYC) stock?
ChartMill assigns a fundamental rating of 7 / 10 to PAYC.
What is the valuation status for PAYC stock?
ChartMill assigns a valuation rating of 4 / 10 to PAYCOM SOFTWARE INC (PAYC). This can be considered as Fairly Valued.
How profitable is PAYCOM SOFTWARE INC (PAYC) stock?
PAYCOM SOFTWARE INC (PAYC) has a profitability rating of 9 / 10.
How financially healthy is PAYCOM SOFTWARE INC?
The financial health rating of PAYCOM SOFTWARE INC (PAYC) is 9 / 10.
Is the dividend of PAYCOM SOFTWARE INC sustainable?
The dividend rating of PAYCOM SOFTWARE INC (PAYC) is 3 / 10 and the dividend payout ratio is 20.52%.