PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
NYSE:PAYC - US70432V1026 - Common Stock
227.15 USD
+1.44 (+0.64%)
227.15 USD
0 (0%)
Overall PAYC gets a fundamental rating of 7 out of 10. We evaluated PAYC against 83 industry peers in the Professional Services industry. PAYC has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. PAYC is quite expensive at the moment. It does show a decent growth rate. With these ratings, PAYC could be worth investigating further for quality investing!.
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.
In the past 5 years PAYC has always been profitable.
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 84.34% of the companies in the same industry.
The Return On Equity of PAYC (23.07%) is better than 75.90% of its industry peers.
The Return On Invested Capital of PAYC (18.87%) is better than 90.36% 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 12.57%.
| 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
PAYC has a better Profit Margin (21.21%) than 92.77% of its industry peers.
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 93.98% of its industry peers.
In the last couple of years the Operating Margin of PAYC has grown nicely.
PAYC's Gross Margin of 82.44% is amongst the best of the industry. PAYC outperforms 91.57% of its industry peers.
In the last couple of years the Gross Margin of PAYC has remained more or less at the same level.
| 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.
Compared to 1 year ago, PAYC has less shares outstanding
PAYC has less shares outstanding than it did 5 years ago.
PAYC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
PAYC has an Altman-Z score of 5.26. This indicates that PAYC is financially healthy and has little risk of bankruptcy at the moment.
PAYC has a better Altman-Z score (5.26) than 85.54% of its industry peers.
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 | 5.26 |
ROIC/WACC2.13
WACC8.87%
2.3 Liquidity
A Current Ratio of 1.30 indicates that PAYC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.30, PAYC is in line with its industry, outperforming 44.58% of the companies in the same industry.
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 44.58% 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
The Earnings Per Share has grown by an nice 11.88% over the past year.
The Earnings Per Share has been growing by 18.56% on average over the past years. This is quite good.
Looking at the last year, PAYC shows a quite strong growth in Revenue. The Revenue has grown by 10.21% in the last year.
The Revenue has been growing by 20.62% on average over the past years. This is a very strong growth!
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.
The Revenue is expected to grow by 7.21% on average over the next years.
EPS Next Y15.57%
EPS Next 2Y12.42%
EPS Next 3Y12.35%
EPS Next 5Y12.55%
Revenue Next Year9.59%
Revenue Next 2Y9.34%
Revenue Next 3Y9.6%
Revenue Next 5Y7.21%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 25.67, PAYC can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as PAYC.
Compared to an average S&P500 Price/Earnings ratio of 27.13, PAYC is valued at the same level.
With a Price/Forward Earnings ratio of 21.92, PAYC is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PAYC is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of PAYC to the average of the S&P500 Index (22.76), we can say PAYC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.67 | ||
| Fwd PE | 21.92 |
4.2 Price Multiples
PAYC's Enterprise Value to EBITDA ratio is in line with the industry average.
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 Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.02 | ||
| EV/EBITDA | 17.24 |
4.3 Compensation for Growth
PAYC's 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)1.65
PEG (5Y)1.38
EPS Next 2Y12.42%
EPS Next 3Y12.35%
5. Dividend
5.1 Amount
With a yearly dividend of 0.66%, PAYC is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.17, PAYC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.32, PAYC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
5.2 History
PAYC has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
PAYC pays out 20.52% of its income as dividend. This is a sustainable payout ratio.
DP20.52%
EPS Next 2Y12.42%
EPS Next 3Y12.35%
227.15
+1.44 (+0.64%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners91.75%
Inst Owner Change0.59%
Ins Owners5.18%
Ins Owner Change0.04%
Market Cap12.78B
Analysts69.6
Price Target254.79 (12.17%)
Short Float %4.49%
Short Ratio3.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
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)1.66%
PT rev (3m)11.16%
EPS NQ rev (1m)2.83%
EPS NQ rev (3m)3.51%
EPS NY rev (1m)3.57%
EPS NY rev (3m)3.95%
Revenue NQ rev (1m)0.82%
Revenue NQ rev (3m)1.01%
Revenue NY rev (1m)0.92%
Revenue NY rev (3m)0.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.67 | ||
| Fwd PE | 21.92 | ||
| P/S | 6.52 | ||
| P/FCF | 36.02 | ||
| P/OCF | 22.9 | ||
| P/B | 7.09 | ||
| P/tB | 7.49 | ||
| EV/EBITDA | 17.24 |
EPS(TTM)8.85
EY3.9%
EPS(NY)10.36
Fwd EY4.56%
FCF(TTM)6.31
FCFY2.78%
OCF(TTM)9.92
OCFY4.37%
SpS34.84
BVpS32.03
TBVpS30.32
PEG (NY)1.65
PEG (5Y)1.38
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%
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-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 | 5.26 |
F-Score7
WACC8.87%
ROIC/WACC2.13
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 Y15.57%
EPS Next 2Y12.42%
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 Year9.59%
Revenue Next 2Y9.34%
Revenue Next 3Y9.6%
Revenue Next 5Y7.21%
EBIT growth 1Y-5.78%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year44.61%
EBIT Next 3Y22.06%
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%