Want to see PAYC full AI Analyst Report?
Top Page
Paycom
(NYSE:PAYC)
Select Model
Select Model
Rating:71Outperform
Price Target:
$178.00
▲(22.46% Upside)
Action:Reiterated
Date:07/10/26
PAYC scores well on financial quality (strong margins and healthy free cash flow) and is supported by a reasonable valuation. The main offsets are the step-up in leverage (amplified by large buybacks) alongside slower growth and only mixed technicals (improving short-term trend but still below the 200-day average).
Positive Factors
High SaaS-like margins
Sustained, software-style margins create durable earnings power and cash flow cushion. High gross and operating margins allow Paycom to invest in product development and automation while maintaining profitability even as top-line growth slows, supporting long-term resilience.
Negative Factors
Step-up in financial leverage
A near-parity debt-to-equity ratio marks a meaningful shift from prior conservatism, reducing financial flexibility. Higher leverage raises refinancing and interest-rate sensitivity, constraining capital choices and increasing downside risk through economic cycles over the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High SaaS-like margins
Sustained, software-style margins create durable earnings power and cash flow cushion. High gross and operating margins allow Paycom to invest in product development and automation while maintaining profitability even as top-line growth slows, supporting long-term resilience.
Read all positive factors
Paycom Key Performance Indicators (KPIs)
Any
Revenue by Type
Breaks down revenue by different service offerings, highlighting which areas are driving growth and where there might be opportunities or challenges.
Breaks down revenue by different service offerings, highlighting which areas are driving growth and where there might be opportunities or challenges.
Data provided by:
The Fly
The FlyPaycom (PAYC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.69B
Dividend Yield0.91%
Average Volume (3M)933.56K
Price to Earnings (P/E)18.9
Beta (1Y)0.86
Revenue Growth9.37%
EPS Growth23.47%
CountryUS
Employees5,770
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)8.68
Shares Outstanding47,631,450
10 Day Avg. Volume620,887
30 Day Avg. Volume933,560
Financial Highlights & Ratios
PEG Ratio-2.19
Price to Book (P/B)5.14
Price to Sales (P/S)4.33
P/FCF Ratio21.79
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$148.20Price Target Upside1.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)10.89
Revenue Forecast (FY)$2.19B
Paycom Business Overview & Revenue Model
Company Description
Paycom Software, Inc., established in 1998 and headquartered in Oklahoma City, Oklahoma, provides a comprehensive, cloud-based human capital management (HCM) platform. This software-as-a-service (SaaS) solution is specifically tailored for small t...
How the Company Makes Money
Paycom primarily makes money by selling subscriptions to its cloud-based HCM software platform, typically under recurring SaaS arrangements where clients pay fees to access and use Paycom’s applications. Revenue is largely driven by ongoing custom...
Paycom Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call conveyed solid operational and financial performance in Q1 with double-digit automation and AI usage gains, margin expansion, and aggressive capital returns via a large buyback and dividend. Management reaffirmed full-year guidance, signaling conservatism for the remainder of the year despite the quarter beat. Key risks highlighted include increased leverage from buybacks funded in part by the credit facility, near-term sales-force ramp timing, and uncertainty on direct AI monetization and CapEx timing. Overall, the positives (revenue and recurring growth, strong margins, product momentum, and shareholder returns) outweigh the negatives, though investors should monitor leverage and execution on sales/bookings cadence for the rest of 2026.Positive Updates
Top-Line Growth
Total revenues of $572 million, up 8% year-over-year; recurring and other revenue of $544 million, up 9% year-over-year.
Negative Updates
Conservative Full-Year Outlook Despite Q1 Beat
Management kept full-year guidance unchanged despite Q1 outperformance, implying expectations for a slowdown in recurring revenue growth later in the year and conservative assumptions for the remainder of 2026.
Read all updates
Q1-2026 Updates
Positive
Negative
Top-Line Growth
Total revenues of $572 million, up 8% year-over-year; recurring and other revenue of $544 million, up 9% year-over-year.
Read all positive updates
Company Guidance
Paycom reaffirmed its full‑year 2026 guidance, forecasting total revenues of $2.175–$2.195 billion (roughly 6.5% YoY growth at the midpoint), recurring and other revenue up 7–8% YoY, and adjusted EBITDA of $950–$970 million (about a 44% margin at the midpoint); the outlook includes approximately $103 million of interest on funds held for clients. The company cited strong Q1 results supporting the guide: total revenue $572 million (+8% YoY), recurring/other revenue $544 million (+9%), GAAP net income $156 million ($3.04 per diluted share), non‑GAAP net income $161 million ($3.15 per diluted share), and adjusted EBITDA $275 million (48.2%, +50 bps YoY). Paycom also noted capital‑allocation and balance‑sheet metrics relevant to the outlook: Q1 cash and cash equivalents of $154 million, average daily funds‑held balance of ~$3.1 billion (+8% YoY), a new 5‑year $2.125 billion credit facility with $675 million drawn, Q1 repurchases of ~8.4 million shares (~15% of 2025 shares) for $1.06 billion, a new $2 billion buyback authorization, and a next quarterly dividend of $0.375 per share.Paycom Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
58
Neutral
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.09B | 2.05B | 1.88B | 1.69B | 1.38B | 1.06B |
| Gross Profit | 1.67B | 1.61B | 1.55B | 1.42B | 1.16B | 893.64M |
| EBITDA | 838.60M | 799.10M | 798.30M | 588.20M | 484.80M | 323.18M |
| Net Income | 469.70M | 453.40M | 502.00M | 340.79M | 281.39M | 195.96M |
Balance Sheet | ||||||
| Total Assets | 4.82B | 7.60B | 5.86B | 4.20B | 3.90B | 3.22B |
| Cash, Cash Equivalents and Short-Term Investments | 153.90M | 370.00M | 402.00M | 294.00M | 400.73M | 277.98M |
| Total Debt | 763.60M | 152.20M | 83.40M | 75.90M | 29.00M | 29.16M |
| Total Liabilities | 4.01B | 5.87B | 4.28B | 2.89B | 2.72B | 2.32B |
| Stockholders Equity | 811.70M | 1.73B | 1.58B | 1.30B | 1.18B | 893.71M |
Cash Flow | ||||||
| Free Cash Flow | 442.60M | 408.00M | 336.60M | 288.21M | 228.31M | 193.17M |
| Operating Cash Flow | 707.00M | 678.90M | 533.90M | 485.04M | 365.10M | 319.36M |
| Investing Cash Flow | -262.10M | -611.20M | -22.20M | -196.71M | -23.29M | -257.67M |
| Financing Cash Flow | -437.50M | 1.02B | 1.11B | -274.66M | 254.59M | 165.72M |
Paycom Technical Analysis
Positive
145.35
Price Trends
139.17
Positive
133.02
Positive
144.74
Positive
Market Momentum
2.88
Positive
56.41
Neutral
23.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAYC, the sentiment is Positive. The current price of 145.35 is below the 20-day moving average (MA) of 147.94, above the 50-day MA of 139.17, and above the 200-day MA of 144.74, indicating a bullish trend. The MACD of 2.88 indicates Positive momentum. The RSI at 56.41 is Neutral, neither overbought nor oversold. The STOCH value of 23.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PAYC.
Paycom Risk Analysis
Paycom disclosed 35 risk factors in its most recent earnings report. Paycom reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Paycom Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $7.32B | 29.09 | 22.36% | ― | 11.31% | 16.71% | |
71 Outperform | $7.69B | 18.89 | 31.03% | 1.03% | 9.37% | 23.47% | |
69 Neutral | $4.82B | 74.56 | 56.13% | ― | 15.47% | -13.79% | |
65 Neutral | $1.63B | -117.48 | 140.84% | ― | 15.79% | -125.94% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
52 Neutral | $2.90B | -21.25 | -12.16% | ― | 31.25% | 56.23% |
* Technology Sector Average
PAYC
Paycom
163.96
-60.98
-27.11%
CVLT
CommVault Systems
117.80
-61.93
-34.46%
PCTY
Paylocity
137.90
-43.54
-24.00%
KC
Kingsoft Cloud Holdings
11.15
-2.31
-17.16%
PRCH
Porch Group
14.45
2.15
17.48%
Paycom Corporate Events
Business Operations and StrategyExecutive/Board Changes
Paycom Adds Former Executives to Expanded Board
Positive
Jul 9, 2026
On July 8, 2026, Paycom Software, Inc. expanded its board of directors from six to eight members and appointed former longtime chief financial officer Craig E. Boelte as a Class I director and former chief information officer and early employee Wi...
Executive/Board ChangesShareholder Meetings
Paycom Shareholders Back Board, Auditor and Executive Pay
Positive
May 7, 2026
Paycom Software, Inc. held its 2026 Annual Meeting of Stockholders on May 4, 2026, where shareholders elected Sharen J. Turney and J.C. Watts Jr. as Class I directors to serve until the 2029 annual meeting, reflecting continued support for the cur...
Stock BuybackDividends
Paycom Announces Dividend and New $2 Billion Buyback
Positive
May 4, 2026
On May 4, 2026, Paycom Software, Inc. announced that its board declared a regular quarterly cash dividend of $0.375 per share, payable on June 8, 2026, to stockholders of record as of May 26, 2026. The same day, the board also authorized a new sto...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.