PAYCOM SOFTWARE INC (PAYC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PAYC - US70432V1026 - Common Stock
162.81 USD
-3.8 (-2.28%)
162.81 USD
0 (0%)
Overall PAYC gets a fundamental rating of 7 out of 10. We evaluated PAYC against 87 industry peers in the Professional Services industry. PAYC gets an excellent profitability rating and is at the same time showing great financial health properties. PAYC has a correct valuation and a medium growth rate. These ratings could make PAYC a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
PAYC had positive earnings in the past year.
PAYC had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 10.67%, PAYC belongs to the best of the industry, outperforming 83.91% of the companies in the same industry.
PAYC's Return On Equity of 26.51% is amongst the best of the industry. PAYC outperforms 80.46% of its industry peers.
PAYC has a better Return On Invested Capital (19.27%) than 91.95% 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 11.98%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 26.51% | ||
| ROIC | 19.27% |
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 Profit Margin of 22.64%. This is amongst the best in the industry. PAYC outperforms 91.95% of its industry peers.
In the last couple of years the Profit Margin of PAYC has grown nicely.
PAYC's Operating Margin of 27.91% is amongst the best of the industry. PAYC outperforms 95.40% of its industry peers.
In the last couple of years the Operating Margin of PAYC has grown nicely.
Looking at the Gross Margin, with a value of 82.95%, PAYC belongs to the top of the industry, outperforming 91.95% 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 | 27.91% | ||
| PM (TTM) | 22.64% | ||
| GM | 82.95% |
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
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
PAYC has an Altman-Z score of 3.91. This indicates that PAYC is financially healthy and has little risk of bankruptcy at the moment.
PAYC has a Altman-Z score of 3.91. This is in the better half of the industry: PAYC outperforms 73.56% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 3.91 |
ROIC/WACC2.18
WACC8.83%
2.3 Liquidity
PAYC has a Current Ratio of 1.22. This is a normal value and indicates that PAYC is financially healthy and should not expect problems in meeting its short term obligations.
PAYC has a worse Current ratio (1.22) than 62.07% of its industry peers.
A Quick Ratio of 1.22 indicates that PAYC should not have too much problems paying its short term obligations.
PAYC has a Quick ratio of 1.22. This is in the lower half of the industry: PAYC underperforms 62.07% of its industry peers.
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 | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 16.77% over the past year.
Measured over the past years, PAYC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.56% on average per year.
PAYC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.72%.
The Revenue has been growing by 20.62% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)16.77%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%16.17%
Revenue 1Y (TTM)9.72%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%9.15%
3.2 Future
The Earnings Per Share is expected to grow by 13.00% on average over the next years. This is quite good.
Based on estimates for the next years, PAYC will show a small growth in Revenue. The Revenue will grow by 7.21% on average per year.
EPS Next Y15.4%
EPS Next 2Y11.92%
EPS Next 3Y12.03%
EPS Next 5Y13%
Revenue Next Year9.59%
Revenue Next 2Y9.22%
Revenue Next 3Y9.35%
Revenue Next 5Y7.21%
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.
4. Valuation
4.1 Price/Earnings Ratio
PAYC is valuated rather expensively with a Price/Earnings ratio of 17.85.
PAYC's Price/Earnings ratio is a bit cheaper when compared to the industry. PAYC is cheaper than 62.07% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.55, PAYC is valued a bit cheaper.
The Price/Forward Earnings ratio is 15.85, which indicates a correct valuation of PAYC.
Based on the Price/Forward Earnings ratio, PAYC is valued a bit cheaper than the industry average as 60.92% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of PAYC to the average of the S&P500 Index (23.78), we can say PAYC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.85 | ||
| Fwd PE | 15.85 |
4.2 Price Multiples
67.82% of the companies in the same industry are more expensive than PAYC, based on the Enterprise Value to EBITDA ratio.
64.37% of the companies in the same industry are more expensive than PAYC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.92 | ||
| EV/EBITDA | 12.1 |
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 12.03% in the coming years.
PEG (NY)1.16
PEG (5Y)0.96
EPS Next 2Y11.92%
EPS Next 3Y12.03%
5. Dividend
5.1 Amount
PAYC has a yearly dividend return of 0.90%, which is pretty low.
In the last 3 months the price of PAYC has falen by -24.83%. 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 an average S&P500 Dividend Yield of 1.87, PAYC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
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
18.80% of the earnings are spent on dividend by PAYC. This is a low number and sustainable payout ratio.
DP18.8%
EPS Next 2Y11.92%
EPS Next 3Y12.03%
162.81
-3.8 (-2.28%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners94.92%
Inst Owner Change0.01%
Ins Owners5.39%
Ins Owner Change-0.04%
Market Cap8.94B
Revenue(TTM)2.00B
Net Income(TTM)453.17M
Analysts71.11
Price Target214.21 (31.57%)
Short Float %4.83%
Short Ratio3.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
Yearly Dividend1.51
Dividend Growth(5Y)N/A
DP18.8%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.38%
Min EPS beat(2)-2.45%
Max EPS beat(2)13.21%
EPS beat(4)3
Avg EPS beat(4)8.36%
Min EPS beat(4)-2.45%
Max EPS beat(4)15.6%
EPS beat(8)6
Avg EPS beat(8)5.55%
EPS beat(12)9
Avg EPS beat(12)5.7%
EPS beat(16)13
Avg EPS beat(16)5.7%
Revenue beat(2)1
Avg Revenue beat(2)-0.73%
Min Revenue beat(2)-1.9%
Max Revenue beat(2)0.45%
Revenue beat(4)2
Avg Revenue beat(4)-0.5%
Min Revenue beat(4)-1.9%
Max Revenue beat(4)0.69%
Revenue beat(8)3
Avg Revenue beat(8)-0.61%
Revenue beat(12)3
Avg Revenue beat(12)-0.87%
Revenue beat(16)7
Avg Revenue beat(16)-0.47%
PT rev (1m)-14.59%
PT rev (3m)-15.93%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-1.67%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.07%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.85 | ||
| Fwd PE | 15.85 | ||
| P/S | 4.47 | ||
| P/FCF | 22.92 | ||
| P/OCF | 13.9 | ||
| P/B | 5.23 | ||
| P/tB | 5.53 | ||
| EV/EBITDA | 12.1 |
EPS(TTM)9.12
EY5.6%
EPS(NY)10.27
Fwd EY6.31%
FCF(TTM)7.1
FCFY4.36%
OCF(TTM)11.71
OCFY7.19%
SpS36.45
BVpS31.13
TBVpS29.44
PEG (NY)1.16
PEG (5Y)0.96
Graham Number79.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.67% | ||
| ROE | 26.51% | ||
| ROCE | 25.78% | ||
| ROIC | 19.27% | ||
| ROICexc | 23.3% | ||
| ROICexgc | 24.57% | ||
| OM | 27.91% | ||
| PM (TTM) | 22.64% | ||
| GM | 82.95% | ||
| FCFM | 19.49% |
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 Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 151.91% | ||
| Cap/Sales | 12.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 88.7% | ||
| Profit Quality | 86.07% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 3.91 |
F-Score7
WACC8.83%
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)16.77%
EPS 3Y22.42%
EPS 5Y18.56%
EPS Q2Q%16.17%
EPS Next Y15.4%
EPS Next 2Y11.92%
EPS Next 3Y12.03%
EPS Next 5Y13%
Revenue 1Y (TTM)9.72%
Revenue growth 3Y21.29%
Revenue growth 5Y20.62%
Sales Q2Q%9.15%
Revenue Next Year9.59%
Revenue Next 2Y9.22%
Revenue Next 3Y9.35%
Revenue Next 5Y7.21%
EBIT growth 1Y-5.75%
EBIT growth 3Y35.74%
EBIT growth 5Y22.9%
EBIT Next Year49.29%
EBIT Next 3Y22.1%
EBIT Next 5Y15.74%
FCF growth 1Y30.62%
FCF growth 3Y20.33%
FCF growth 5Y20.7%
OCF growth 1Y34.25%
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 6 / 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 8 / 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 18.8%.