William Blair analyst Jake Roberge has maintained their neutral stance on PAYC stock, giving a Hold rating today.
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Jake Roberge has given his Hold rating due to a combination of factors surrounding Paycom’s recent financial performance and strategic investments. Although Paycom’s revenue and EBITDA results aligned with market expectations, the anticipation for a stronger performance was not fully met, especially considering the company’s previous trend of exceeding forecasts. This tempered investor enthusiasm, leading to a more cautious outlook.
Furthermore, Paycom’s substantial investment in GPU and data center capacity for its new IWant solution, while promising for future growth, has temporarily impacted cash flow. Management expects these investments to peak in the third quarter, with free cash flow projected to normalize by 2026. While the IWant solution has shown early customer interest and is expected to enhance growth through new client acquisitions and increased product adoption, the absence of a direct subscription fee adds uncertainty to immediate revenue impacts. These factors collectively contribute to the Hold rating, as the company navigates its strategic shift back to growth amid a stable demand environment.
In another report released today, Mizuho Securities also maintained a Hold rating on the stock with a $180.00 price target.