Paycom (PAYC) AI Stock Analysis

• Market Cap: $12.74B
• Dividend Yield: 0.68%
• Average Volume (3M): 653.44K
• Price to Earnings (P/E): 29.3
• Beta (1Y): 0.55
• Revenue Growth: 10.21%
• EPS Growth: -10.56%
• Country: US
• Employees: 7,306
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 2.06
• Shares Outstanding: 57,876,797
• 10 Day Avg. Volume: 701,772
• 30 Day Avg. Volume: 653,437
• PEG Ratio: 0.45
• Price to Book (P/B): 7.31
• Price to Sales (P/S): 6.12
• P/FCF Ratio: 33.78
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 6.44
• Enterprise Value/Gross Profit: 7.81
• Enterprise Value/Ebitda: 17.28
• 1Y Price Target: $253.00
• Price Target Upside: 15.18% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 77 Outperform
• Price Target: $253.00 ▲(15.18% Upside)

Paycom's strong financial performance and positive earnings call are the primary drivers of its overall score. The company's robust revenue growth, profitability, and strategic product launches outweigh the mixed technical indicators and high valuation concerns.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, enhancing long-term financial stability.

Product Innovation

The introduction of innovative products like IWant strengthens Paycom's competitive edge, driving user engagement and client satisfaction.

Financial Position

A strong cash position and no debt provide Paycom with financial flexibility to invest in growth opportunities and weather economic downturns.

Negative Factors

Interest Revenue Decline

Declining interest revenue can reduce overall profitability, especially if interest rates continue to fall, impacting long-term earnings potential.

Increased Expenditures

Higher capital and marketing expenditures could pressure margins and limit free cash flow, affecting short-term financial flexibility.

Equity Ratio Concerns

A relatively low equity ratio indicates potential risk if liabilities increase significantly, which could strain financial stability.

Paycom Business Overview & Revenue Model

Company Description

Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. It offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution provides a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, labor management reports/push reporting, and geofencing/geotracking, and Microfence, a proprietary Bluetooth. Its HCM solution also offers payroll applications comprising better employee transaction interface, payroll and tax management, Paycom pay, expense management, mileage tracker/fixed and variable rates, garnishment management, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, and Paycom learning and content subscriptions, as well as my analytics, which offer employment predictor reporting. In addition, its HCM solution provides manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration/benefits to carrier; COBRA administration; personnel action and performance discussion forms; surveys; and affordable care act applications, as well as Clue, which securely collect, track, and manage the vaccination and testing data of the workforce. Paycom Software, Inc. was founded in 1998 and is headquartered in Oklahoma City, Oklahoma.

How the Company Makes Money

Paycom generates revenue primarily through a subscription-based model for its software solutions. The company charges clients a fee based on the number of employees they manage through the system, creating a scalable revenue stream that grows as clients expand their workforce. Key revenue streams include software licensing fees, payroll processing fees, and additional charges for various HR services such as talent acquisition and employee management tools. Significant partnerships with various organizations and ongoing investments in product development also contribute to Paycom's earnings by enhancing its service offerings and maintaining a competitive edge in the HCM market.

Paycom Financial Statement Overview

Summary

Paycom exhibits a strong financial profile with impressive revenue and profit growth, efficient cost management, and robust cash flow generation. The company's low leverage and high return on equity further reinforce its financial stability. While the equity ratio is relatively low, the company's consistent performance and cash flow strength mitigate potential risks.

Income Statement

Paycom has demonstrated strong revenue growth with a consistent upward trajectory from $737.67 million in 2019 to $1.88 billion in 2024. The gross profit margin remains robust at 82.2% in 2024, indicating efficient cost management. The net profit margin improved significantly from 19.5% in 2019 to 26.7% in 2024, showcasing enhanced profitability. EBIT and EBITDA margins have also shown positive trends, reinforcing operational efficiency.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.05 in 2024, indicating minimal leverage. Return on equity has improved to 31.9% in 2024, highlighting effective use of shareholders' funds. The equity ratio stands at 26.9%, suggesting a stable capital structure. However, the relatively low equity ratio indicates potential risk if liabilities increase significantly.

Cash Flow

Paycom's cash flow is strong, with a free cash flow growth rate of 18.3% from 2023 to 2024, reflecting healthy cash generation. The operating cash flow to net income ratio is 1.06 in 2024, indicating efficient cash conversion from profits. The free cash flow to net income ratio is 0.68, showing substantial cash available after capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.96B	1.88B	1.69B	1.38B	1.06B	841.43M
Gross Profit	1.62B	1.55B	1.42B	1.16B	893.64M	717.89M
EBITDA	730.55M	798.30M	588.20M	484.80M	323.18M	239.33M
Net Income	415.78M	502.00M	340.79M	281.39M	195.96M	143.45M
Balance Sheet
Total Assets	4.03B	5.86B	4.20B	3.90B	3.22B	2.61B
Cash, Cash Equivalents and Short-Term Investments	532.20M	402.00M	294.00M	400.73M	277.98M	151.71M
Total Debt	81.20M	83.40M	75.90M	29.00M	29.16M	30.89M
Total Liabilities	2.23B	4.28B	2.89B	2.72B	2.32B	1.95B
Stockholders Equity	1.80B	1.58B	1.30B	1.18B	893.71M	655.64M
Cash Flow
Free Cash Flow	359.20M	341.00M	288.21M	228.31M	193.17M	133.10M
Operating Cash Flow	558.17M	533.90M	485.04M	365.10M	319.36M	227.21M
Investing Cash Flow	-659.08M	-22.20M	-196.71M	-23.29M	-257.67M	-117.88M
Financing Cash Flow	-860.75M	1.11B	-274.66M	254.59M	165.72M	-165.91M

Paycom Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 219.66
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAYC, the sentiment is Neutral. The current price of 219.66 is below the 20-day moving average (MA) of 221.63, below the 50-day MA of 225.27, and below the 200-day MA of 223.93, indicating a bearish trend. The MACD of -2.34 indicates Positive momentum. The RSI at 46.77 is Neutral, neither overbought nor oversold. The STOCH value of 48.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PAYC.

Paycom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVLT	78 Outperform	8.61B	106.90	22.23%	―	21.62%	-53.99%
PAYC	77 Outperform	$12.74B	29.30	25.76%	0.68%	10.21%	-10.56%
DAY	76 Outperform	10.85B	226.68	0.71%	―	13.46%	2.06%
PCTY	75 Outperform	9.27B	41.25	18.41%	―	13.74%	10.99%
PRCH	62 Neutral	1.97B	39.44	-190.60%	―	-7.41%	0.00%
KC	61 Neutral	4.72B	-14.26	-38.05%	―	20.42%	-9.39%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Paycom Corporate Events

Paycom Announces Executive Team Changes on August 18

On August 18, 2025, Paycom announced significant changes in its executive team, including the promotion of Shane Hadlock to Chief Client Officer and Chief Technology Officer, and Rachael Gannon to Chief Automation Officer. Brad Smith will transition to Senior Technical Strategist after resigning as Chief Information Officer on October 31, 2025. These changes aim to enhance Paycom’s technical capabilities and product strategy, focusing on client ROI and innovation. Hadlock and Gannon’s extensive experience within the company positions them to drive further growth and automation, while Smith’s new role will continue to leverage his expertise in innovative solutions.

The most recent analyst rating on (PAYC) stock is a Hold with a $175.00 price target. To see the full list of analyst forecasts on Paycom stock, see the PAYC Stock Forecast page.