PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
NYSE:PAYC • US70432V1026
114.43 USD
-0.28 (-0.24%)
At close: Feb 23, 2026
114.6 USD
+0.17 (+0.15%)
After Hours: 2/23/2026, 8:08:14 PM
Taking everything into account, PAYC scores 7 out of 10 in our fundamental rating. PAYC was compared to 88 industry peers in the Professional Services industry. While PAYC belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PAYC is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings could make PAYC a good candidate for value 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.
- PAYC had positive earnings in each of the past 5 years.
- Each year in the past 5 years PAYC had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 5.97%, PAYC is doing good in the industry, outperforming 65.91% of the companies in the same industry.
- PAYC has a better Return On Equity (26.19%) than 80.68% of its industry peers.
- PAYC has a Return On Invested Capital of 19.14%. This is amongst the best in the industry. PAYC outperforms 85.23% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for PAYC is significantly above the industry average of 12.89%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.97% | ||
| ROE | 26.19% | ||
| ROIC | 19.14% |
ROA(3y)7.55%
ROA(5y)7.19%
ROE(3y)28.06%
ROE(5y)25.98%
ROIC(3y)21.34%
ROIC(5y)19.66%
1.3 Margins
- Looking at the Profit Margin, with a value of 22.10%, PAYC belongs to the top of the industry, outperforming 93.18% of the companies in the same industry.
- In the last couple of years the Profit Margin of PAYC has grown nicely.
- The Operating Margin of PAYC (27.65%) is better than 95.45% of its industry peers.
- In the last couple of years the Operating Margin of PAYC has grown nicely.
- PAYC's Gross Margin of 83.17% is amongst the best of the industry. PAYC outperforms 94.32% of its industry peers.
- PAYC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.65% | ||
| PM (TTM) | 22.1% | ||
| GM | 83.17% |
OM growth 3Y0.13%
OM growth 5Y4.56%
PM growth 3Y2.6%
PM growth 5Y5.32%
GM growth 3Y-0.54%
GM growth 5Y-0.51%
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
- PAYC has less shares outstanding than it did 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.
2.2 Solvency
- Based on the Altman-Z score of 1.65, we must say that PAYC is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.65, PAYC is doing worse than 61.36% 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 | 1.65 |
ROIC/WACC2.2
WACC8.72%
2.3 Liquidity
- A Current Ratio of 1.09 indicates that PAYC should not have too much problems paying its short term obligations.
- PAYC has a Current ratio of 1.09. This is in the lower half of the industry: PAYC underperforms 70.45% of its industry peers.
- PAYC has a Quick Ratio of 1.09. This is a normal value and indicates that PAYC is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.09, PAYC is doing worse than 70.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
- PAYC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.80%, which is quite good.
- Measured over the past years, PAYC shows a very strong growth in Earnings Per Share. The EPS has been growing by 21.52% on average per year.
- The Revenue has grown by 8.95% in the past year. This is quite good.
- The Revenue has been growing by 19.51% on average over the past years. This is quite good.
EPS 1Y (TTM)12.8%
EPS 3Y14.51%
EPS 5Y21.52%
EPS Q2Q%5.6%
Revenue 1Y (TTM)8.95%
Revenue growth 3Y14.27%
Revenue growth 5Y19.51%
Sales Q2Q%10.23%
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 12.93% on average per year.
- The Revenue is expected to grow by 7.05% on average over the next years.
EPS Next Y10.6%
EPS Next 2Y11.13%
EPS Next 3Y14.35%
EPS Next 5Y12.93%
Revenue Next Year6.98%
Revenue Next 2Y7.2%
Revenue Next 3Y7.39%
Revenue Next 5Y7.05%
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 12.37, the valuation of PAYC can be described as correct.
- PAYC's Price/Earnings ratio is a bit cheaper when compared to the industry. PAYC is cheaper than 73.86% of the companies in the same industry.
- PAYC is valuated cheaply when we compare the Price/Earnings ratio to 26.64, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 11.18 indicates a reasonable valuation of PAYC.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of PAYC indicates a somewhat cheap valuation: PAYC is cheaper than 73.86% of the companies listed in the same industry.
- PAYC is valuated cheaply when we compare the Price/Forward Earnings ratio to 27.75, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.37 | ||
| Fwd PE | 11.18 |
4.2 Price Multiples
- PAYC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. PAYC is cheaper than 80.68% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, PAYC is valued a bit cheaper than 71.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.57 | ||
| EV/EBITDA | 7.97 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The excellent profitability rating of PAYC may justify a higher PE ratio.
- A more expensive valuation may be justified as PAYC's earnings are expected to grow with 14.35% in the coming years.
PEG (NY)1.17
PEG (5Y)0.57
EPS Next 2Y11.13%
EPS Next 3Y14.35%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.24%, PAYC has a reasonable but not impressive dividend return.
- In the last 3 months the price of PAYC has falen by -29.00%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 1.55, PAYC pays a bit more dividend than its industry peers.
- Compared to the average S&P500 Dividend Yield of 1.80, PAYC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
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 18.70% of its income as dividend. This is a sustainable payout ratio.
DP18.7%
EPS Next 2Y11.13%
EPS Next 3Y14.35%
114.43
-0.28 (-0.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)02-11 2026-02-11/amc
Earnings (Next)05-05 2026-05-05/amc
Inst Owners95.05%
Inst Owner Change-0.47%
Ins Owners5.42%
Ins Owner Change1.03%
Market Cap6.28B
Revenue(TTM)2.05B
Net Income(TTM)453.40M
Analysts72.14
Price Target202.09 (76.61%)
Short Float %7.01%
Short Ratio2.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
Yearly Dividend1.53
Dividend Growth(5Y)N/A
DP18.7%
Div Incr Years1
Div Non Decr Years1
Ex-Date03-09 2026-03-09 (0.375)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.92%
Min EPS beat(2)-2.45%
Max EPS beat(2)-1.4%
EPS beat(4)2
Avg EPS beat(4)4.11%
Min EPS beat(4)-2.45%
Max EPS beat(4)13.21%
EPS beat(8)5
Avg EPS beat(8)4.59%
EPS beat(12)8
Avg EPS beat(12)4.42%
EPS beat(16)12
Avg EPS beat(16)5.58%
Revenue beat(2)0
Avg Revenue beat(2)-1.81%
Min Revenue beat(2)-1.9%
Max Revenue beat(2)-1.73%
Revenue beat(4)1
Avg Revenue beat(4)-1.1%
Min Revenue beat(4)-1.9%
Max Revenue beat(4)0.45%
Revenue beat(8)2
Avg Revenue beat(8)-0.93%
Revenue beat(12)3
Avg Revenue beat(12)-0.94%
Revenue beat(16)6
Avg Revenue beat(16)-0.66%
PT rev (1m)-3.02%
PT rev (3m)-5.66%
EPS NQ rev (1m)-1.61%
EPS NQ rev (3m)-1.25%
EPS NY rev (1m)-0.28%
EPS NY rev (3m)-0.59%
Revenue NQ rev (1m)-2.08%
Revenue NQ rev (3m)-1.98%
Revenue NY rev (1m)-1.58%
Revenue NY rev (3m)-1.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.37 | ||
| Fwd PE | 11.18 | ||
| P/S | 3.06 | ||
| P/FCF | 15.57 | ||
| P/OCF | 9.26 | ||
| P/B | 3.63 | ||
| P/tB | 3.83 | ||
| EV/EBITDA | 7.97 |
EPS(TTM)9.25
EY8.08%
EPS(NY)10.23
Fwd EY8.94%
FCF(TTM)7.35
FCFY6.42%
OCF(TTM)12.36
OCFY10.8%
SpS37.36
BVpS31.53
TBVpS29.91
PEG (NY)1.17
PEG (5Y)0.57
Graham Number81.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.97% | ||
| ROE | 26.19% | ||
| ROCE | 25.43% | ||
| ROIC | 19.14% | ||
| ROICexc | 22.95% | ||
| ROICexgc | 24.11% | ||
| OM | 27.65% | ||
| PM (TTM) | 22.1% | ||
| GM | 83.17% | ||
| FCFM | 19.67% |
ROA(3y)7.55%
ROA(5y)7.19%
ROE(3y)28.06%
ROE(5y)25.98%
ROIC(3y)21.34%
ROIC(5y)19.66%
ROICexc(3y)26.18%
ROICexc(5y)24.81%
ROICexgc(3y)27.93%
ROICexgc(5y)26.92%
ROCE(3y)28.35%
ROCE(5y)26.12%
ROICexgc growth 3Y-4.84%
ROICexgc growth 5Y3.38%
ROICexc growth 3Y-3.25%
ROICexc growth 5Y3.88%
OM growth 3Y0.13%
OM growth 5Y4.56%
PM growth 3Y2.6%
PM growth 5Y5.32%
GM growth 3Y-0.54%
GM growth 5Y-0.51%
F-Score6
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 156.21% | ||
| Cap/Sales | 13.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.31% | ||
| Profit Quality | 88.99% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 1.65 |
F-Score6
WACC8.72%
ROIC/WACC2.2
Cap/Depr(3y)154.73%
Cap/Depr(5y)159.91%
Cap/Sales(3y)11.84%
Cap/Sales(5y)11.49%
Profit Quality(3y)80.21%
Profit Quality(5y)84.06%
High Growth Momentum
Growth
EPS 1Y (TTM)12.8%
EPS 3Y14.51%
EPS 5Y21.52%
EPS Q2Q%5.6%
EPS Next Y10.6%
EPS Next 2Y11.13%
EPS Next 3Y14.35%
EPS Next 5Y12.93%
Revenue 1Y (TTM)8.95%
Revenue growth 3Y14.27%
Revenue growth 5Y19.51%
Sales Q2Q%10.23%
Revenue Next Year6.98%
Revenue Next 2Y7.2%
Revenue Next 3Y7.39%
Revenue Next 5Y7.05%
EBIT growth 1Y-10.58%
EBIT growth 3Y14.41%
EBIT growth 5Y24.97%
EBIT Next Year40.24%
EBIT Next 3Y19.07%
EBIT Next 5Y16.23%
FCF growth 1Y19.88%
FCF growth 3Y20.91%
FCF growth 5Y24.83%
OCF growth 1Y27.16%
OCF growth 3Y22.97%
OCF growth 5Y24.47%
PAYCOM SOFTWARE INC / PAYC FAQ
What is the fundamental rating for PAYC stock?
ChartMill assigns a fundamental rating of 7 / 10 to PAYC.
Can you provide the valuation status for PAYCOM SOFTWARE INC?
ChartMill assigns a valuation rating of 7 / 10 to PAYCOM SOFTWARE INC (PAYC). This can be considered as Undervalued.
How profitable is PAYCOM SOFTWARE INC (PAYC) stock?
PAYCOM SOFTWARE INC (PAYC) has a profitability rating of 9 / 10.
What are the PE and PB ratios of PAYCOM SOFTWARE INC (PAYC) stock?
The Price/Earnings (PE) ratio for PAYCOM SOFTWARE INC (PAYC) is 12.37 and the Price/Book (PB) ratio is 3.63.
How sustainable is the dividend of PAYCOM SOFTWARE INC (PAYC) stock?
The dividend rating of PAYCOM SOFTWARE INC (PAYC) is 3 / 10 and the dividend payout ratio is 18.7%.