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PAYCHEX INC (PAYX) Stock Fundamental Analysis

NASDAQ:PAYX - Nasdaq - US7043261079 - Common Stock - Currency: USD

143.29  -2.02 (-1.39%)

After market: 143.29 0 (0%)

Fundamental Rating

5

PAYX gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 82 industry peers in the Professional Services industry. PAYX scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, PAYX is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

In the past year PAYX was profitable.
PAYX had a positive operating cash flow in the past year.
Each year in the past 5 years PAYX has been profitable.
Each year in the past 5 years PAYX had a positive operating cash flow.
PAYX Yearly Net Income VS EBIT VS OCF VS FCFPAYX 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 2025 500M 1B 1.5B 2B

1.2 Ratios

With an excellent Return On Assets value of 10.01%, PAYX belongs to the best of the industry, outperforming 80.49% of the companies in the same industry.
PAYX has a better Return On Equity (40.15%) than 89.02% of its industry peers.
PAYX's Return On Invested Capital of 18.44% is amongst the best of the industry. PAYX outperforms 87.80% of its industry peers.
PAYX had an Average Return On Invested Capital over the past 3 years of 28.05%. This is significantly above the industry average of 12.27%.
The last Return On Invested Capital (18.44%) for PAYX is well below the 3 year average (28.05%), which needs to be investigated, but indicates that PAYX had better years and this may not be a problem.
Industry RankSector Rank
ROA 10.01%
ROE 40.15%
ROIC 18.44%
ROA(3y)13.68%
ROA(5y)13.48%
ROE(3y)43.07%
ROE(5y)42.31%
ROIC(3y)28.05%
ROIC(5y)28.53%
PAYX Yearly ROA, ROE, ROICPAYX Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

1.3 Margins

With an excellent Profit Margin value of 29.74%, PAYX belongs to the best of the industry, outperforming 96.34% of the companies in the same industry.
PAYX's Profit Margin has improved in the last couple of years.
PAYX has a better Operating Margin (41.81%) than 98.78% of its industry peers.
In the last couple of years the Operating Margin of PAYX has grown nicely.
PAYX's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 41.81%
PM (TTM) 29.74%
GM 85.95%
OM growth 3Y1.57%
OM growth 5Y2.95%
PM growth 3Y-0.51%
PM growth 5Y1.82%
GM growth 3Y-7.43%
GM growth 5Y-4.63%
PAYX Yearly Profit, Operating, Gross MarginsPAYX Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80

5

2. Health

2.1 Basic Checks

PAYX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
PAYX has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, PAYX has more shares outstanding
The debt/assets ratio for PAYX is higher compared to a year ago.
PAYX Yearly Shares OutstandingPAYX Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M
PAYX Yearly Total Debt VS Total AssetsPAYX Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B

2.2 Solvency

An Altman-Z score of 3.63 indicates that PAYX is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.63, PAYX is in the better half of the industry, outperforming 68.29% of the companies in the same industry.
The Debt to FCF ratio of PAYX is 2.87, which is a good value as it means it would take PAYX, 2.87 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.87, PAYX is in the better half of the industry, outperforming 64.63% of the companies in the same industry.
PAYX has a Debt/Equity ratio of 1.11. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.11, PAYX is doing worse than 71.95% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.11
Debt/FCF 2.87
Altman-Z 3.63
ROIC/WACC2.1
WACC8.79%
PAYX Yearly LT Debt VS Equity VS FCFPAYX Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B

2.3 Liquidity

PAYX has a Current Ratio of 1.28. This is a normal value and indicates that PAYX is financially healthy and should not expect problems in meeting its short term obligations.
PAYX's Current ratio of 1.28 is in line compared to the rest of the industry. PAYX outperforms 43.90% of its industry peers.
A Quick Ratio of 1.28 indicates that PAYX should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.28, PAYX is in line with its industry, outperforming 43.90% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.28
Quick Ratio 1.28
PAYX Yearly Current Assets VS Current LiabilitesPAYX Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B

4

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 5.51% over the past year.
The Earnings Per Share has been growing by 10.74% on average over the past years. This is quite good.
Looking at the last year, PAYX shows a small growth in Revenue. The Revenue has grown by 5.56% in the last year.
Measured over the past years, PAYX shows a small growth in Revenue. The Revenue has been growing by 6.64% on average per year.
EPS 1Y (TTM)5.51%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%6.25%
Revenue 1Y (TTM)5.56%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%10.21%

3.2 Future

The Earnings Per Share is expected to grow by 6.18% on average over the next years.
The Revenue is expected to grow by 5.65% on average over the next years.
EPS Next Y11.74%
EPS Next 2Y9.81%
EPS Next 3Y9.33%
EPS Next 5Y6.18%
Revenue Next Year17.63%
Revenue Next 2Y11.95%
Revenue Next 3Y9.21%
Revenue Next 5Y5.65%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
PAYX Yearly Revenue VS EstimatesPAYX Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2B 4B 6B 8B
PAYX Yearly EPS VS EstimatesPAYX Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6

3

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 28.77 indicates a quite expensive valuation of PAYX.
Compared to the rest of the industry, the Price/Earnings ratio of PAYX is on the same level as its industry peers.
PAYX is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
PAYX is valuated quite expensively with a Price/Forward Earnings ratio of 25.75.
PAYX's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, PAYX is valued at the same level.
Industry RankSector Rank
PE 28.77
Fwd PE 25.75
PAYX Price Earnings VS Forward Price EarningsPAYX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

PAYX's Enterprise Value to EBITDA is on the same level as the industry average.
PAYX's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 29.87
EV/EBITDA 21.63
PAYX Per share dataPAYX EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5 10 15

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PAYX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.45
PEG (5Y)2.68
EPS Next 2Y9.81%
EPS Next 3Y9.33%

6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.97%, PAYX has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.07, PAYX pays a better dividend. On top of this PAYX pays more dividend than 92.68% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, PAYX pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.97%

5.2 History

On average, the dividend of PAYX grows each year by 10.17%, which is quite nice.
PAYX has been paying a dividend for at least 10 years, so it has a reliable track record.
PAYX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.17%
Div Incr Years11
Div Non Decr Years11
PAYX Yearly Dividends per sharePAYX Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 2 3

5.3 Sustainability

PAYX pays out 87.40% of its income as dividend. This is not a sustainable payout ratio.
PAYX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP87.4%
EPS Next 2Y9.81%
EPS Next 3Y9.33%
PAYX Yearly Income VS Free CF VS DividendPAYX Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B
PAYX Dividend Payout.PAYX Dividend Payout, showing the Payout Ratio.PAYX Dividend Payout.PayoutRetained Earnings

PAYCHEX INC

NASDAQ:PAYX (7/11/2025, 8:00:02 PM)

After market: 143.29 0 (0%)

143.29

-2.02 (-1.39%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)06-25 2025-06-25/bmo
Earnings (Next)09-29 2025-09-29/bmo
Inst Owners81.48%
Inst Owner Change0%
Ins Owners10.61%
Ins Owner Change-0.12%
Market Cap51.66B
Analysts53.64
Price Target154.05 (7.51%)
Short Float %3.84%
Short Ratio5.98
Dividend
Industry RankSector Rank
Dividend Yield 2.97%
Yearly Dividend4.02
Dividend Growth(5Y)10.17%
DP87.4%
Div Incr Years11
Div Non Decr Years11
Ex-Date05-12 2025-05-12 (1.08)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.61%
Min EPS beat(2)-1.94%
Max EPS beat(2)-1.27%
EPS beat(4)0
Avg EPS beat(4)-1.05%
Min EPS beat(4)-1.94%
Max EPS beat(4)-0.41%
EPS beat(8)1
Avg EPS beat(8)-0.87%
EPS beat(12)4
Avg EPS beat(12)-0.07%
EPS beat(16)7
Avg EPS beat(16)1.71%
Revenue beat(2)0
Avg Revenue beat(2)-2.48%
Min Revenue beat(2)-2.51%
Max Revenue beat(2)-2.46%
Revenue beat(4)0
Avg Revenue beat(4)-2.09%
Min Revenue beat(4)-2.51%
Max Revenue beat(4)-1.65%
Revenue beat(8)0
Avg Revenue beat(8)-2.33%
Revenue beat(12)0
Avg Revenue beat(12)-1.91%
Revenue beat(16)4
Avg Revenue beat(16)-0.93%
PT rev (1m)2.03%
PT rev (3m)3.39%
EPS NQ rev (1m)-1.75%
EPS NQ rev (3m)-2.06%
EPS NY rev (1m)3.04%
EPS NY rev (3m)2.69%
Revenue NQ rev (1m)3.22%
Revenue NQ rev (3m)7.1%
Revenue NY rev (1m)7.82%
Revenue NY rev (3m)10.41%
Valuation
Industry RankSector Rank
PE 28.77
Fwd PE 25.75
P/S 9.27
P/FCF 29.87
P/OCF 26.48
P/B 12.51
P/tB N/A
EV/EBITDA 21.63
EPS(TTM)4.98
EY3.48%
EPS(NY)5.56
Fwd EY3.88%
FCF(TTM)4.8
FCFY3.35%
OCF(TTM)5.41
OCFY3.78%
SpS15.46
BVpS11.45
TBVpS-6.47
PEG (NY)2.45
PEG (5Y)2.68
Profitability
Industry RankSector Rank
ROA 10.01%
ROE 40.15%
ROCE 24.24%
ROIC 18.44%
ROICexc 22.29%
ROICexgc 118.16%
OM 41.81%
PM (TTM) 29.74%
GM 85.95%
FCFM 31.04%
ROA(3y)13.68%
ROA(5y)13.48%
ROE(3y)43.07%
ROE(5y)42.31%
ROIC(3y)28.05%
ROIC(5y)28.53%
ROICexc(3y)39.45%
ROICexc(5y)39.54%
ROICexgc(3y)122.07%
ROICexgc(5y)118.33%
ROCE(3y)36.92%
ROCE(5y)37.54%
ROICexcg growth 3Y-2.65%
ROICexcg growth 5Y2.68%
ROICexc growth 3Y-20.58%
ROICexc growth 5Y-8.53%
OM growth 3Y1.57%
OM growth 5Y2.95%
PM growth 3Y-0.51%
PM growth 5Y1.82%
GM growth 3Y-7.43%
GM growth 5Y-4.63%
F-Score4
Asset Turnover0.34
Health
Industry RankSector Rank
Debt/Equity 1.11
Debt/FCF 2.87
Debt/EBITDA 1.8
Cap/Depr 105.78%
Cap/Sales 3.98%
Interest Coverage 250
Cash Conversion 76.85%
Profit Quality 104.36%
Current Ratio 1.28
Quick Ratio 1.28
Altman-Z 3.63
F-Score4
WACC8.79%
ROIC/WACC2.1
Cap/Depr(3y)100.38%
Cap/Depr(5y)88.13%
Cap/Sales(3y)3.56%
Cap/Sales(5y)3.37%
Profit Quality(3y)101.67%
Profit Quality(5y)102.47%
High Growth Momentum
Growth
EPS 1Y (TTM)5.51%
EPS 3Y9.82%
EPS 5Y10.74%
EPS Q2Q%6.25%
EPS Next Y11.74%
EPS Next 2Y9.81%
EPS Next 3Y9.33%
EPS Next 5Y6.18%
Revenue 1Y (TTM)5.56%
Revenue growth 3Y6.51%
Revenue growth 5Y6.64%
Sales Q2Q%10.21%
Revenue Next Year17.63%
Revenue Next 2Y11.95%
Revenue Next 3Y9.21%
Revenue Next 5Y5.65%
EBIT growth 1Y5.23%
EBIT growth 3Y8.18%
EBIT growth 5Y9.79%
EBIT Next Year14.73%
EBIT Next 3Y8.82%
EBIT Next 5Y8.06%
FCF growth 1Y1.37%
FCF growth 3Y6.17%
FCF growth 5Y5.81%
OCF growth 1Y2.81%
OCF growth 3Y7.07%
OCF growth 5Y6.25%