Paycom (PAYC)
NYSE:PAYC
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Paycom
(NYSE:PAYC)
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Rating:71Outperform
Price Target:
$140.00
▲(23.25% Upside)
Action:ReiteratedDate:03/13/26
The score is primarily supported by strong underlying financial quality (high margins, cash generation, and historically conservative balance sheet) and a constructive earnings outlook that maintains strong profitability despite slower growth. Offsetting factors are weak technical trend/momentum and a guidance-driven growth deceleration, with corporate actions slightly mixed due to increased revolver usage despite continued capital returns.
Positive Factors
High margins and strong free cash flow
Sustained high cash generation and improving operating dollars provide durable funding for R&D, client success, and capital returns. Strong FCF supports reinvestment in automation and buybacks/dividends while buffering execution risk and preserving optionality through business cycles.
Negative Factors
Guidance implies clear growth deceleration
A materially slower growth trajectory versus 2025 reduces revenue upside and increases the onus on margin expansion and buybacks to drive shareholder returns. Persistent deceleration could pressure long-term investment funding and requires sustained product and sales execution to reverse.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and strong free cash flow
Sustained high cash generation and improving operating dollars provide durable funding for R&D, client success, and capital returns. Strong FCF supports reinvestment in automation and buybacks/dividends while buffering execution risk and preserving optionality through business cycles.
Read all positive factors
Paycom (PAYC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.23B
Dividend Yield0.94%
Average Volume (3M)2.01M
Price to Earnings (P/E)19.6
Beta (1Y)0.81
Revenue Growth9.72%
EPS Growth-2.69%
CountryUS
Employees5,770
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)2.45
Shares Outstanding54,275,097
10 Day Avg. Volume955,005
30 Day Avg. Volume2,011,808
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 Cap0.95
Enterprise Value/Revenue2.90
Enterprise Value/Gross Profit3.59
Enterprise Value/Ebitda7.44
Forecast
1Y Price Target
$150.57Price Target Upside32.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)10.45
Revenue Forecast (FY)$2.19B
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 ...
How the Company Makes Money
Paycom generates revenue primarily through subscription fees for its cloud-based HCM software. Its revenue model includes both initial implementation fees and ongoing monthly subscription fees, which provide a predictable revenue stream. Key reven...
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 Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call highlighted strong execution in 2025: double-digit recurring revenue growth, margin expansion (adjusted EBITDA margin ~43%), significant operating cash flow improvement, product innovation (IWant, Beti, GONE) with measurable ROI, improved retention (91%), and continued upmarket momentum. Management provided disciplined, conservative initial guidance for 2026 (6%–7% total revenue growth, 7%–8% recurring growth) that implies a deceleration versus 2025, and emphasized dependence on sales execution, retraining, and new logo acquisition to drive future growth. Key balance-sheet strengths (cash, zero debt), sizable remaining buyback authorization, and continued investment in automation temper near-term guidance concerns. Overall, positives (robust profitability, strong cash generation, product differentiation, retention improvement) materially outweigh the lowlights (moderate client growth, guidance slowdown, execution/training risk), indicating a constructive outlook but with execution and macro sensitivities to monitor.Positive Updates
Revenue Growth — Q4 and Full Year 2025
Total revenue in Q4 2025 was $544 million, up 10% year-over-year; recurring and other revenue in Q4 was $517 million, up 11% year-over-year. Full year 2025 total revenue was $2.05 billion, with recurring and other revenue of $1.94 billion, representing 10% year-over-year recurring revenue growth (above the company’s initial expectation).
Negative Updates
Guidance Implies Deceleration vs. 2025 Performance
2026 recurring revenue guidance of 7%–8% and total revenue growth guidance of 6%–7% indicate a slowdown versus 2025 recurring revenue growth of 10% and Q4 recurring growth of 11%, despite strong product momentum and retention improvements.
Read all updates
Q4-2025 Updates
Positive
Negative
Revenue Growth — Q4 and Full Year 2025
Total revenue in Q4 2025 was $544 million, up 10% year-over-year; recurring and other revenue in Q4 was $517 million, up 11% year-over-year. Full year 2025 total revenue was $2.05 billion, with recurring and other revenue of $1.94 billion, representing 10% year-over-year recurring revenue growth (above the company’s initial expectation).
Read all positive updates
Company Guidance
Paycom's initial 2026 guidance calls for total revenue of $2.175–2.195 billion (≈6–7% YoY), 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 roughly $103 million of interest on funds held for clients and assumes two rate cuts in 2026. For context, full-year 2025 results were $2.05 billion total revenue with $1.94 billion recurring revenue (10% growth), adjusted EBITDA of $882 million (43% margin), GAAP net income of $453 million ($8.08 diluted EPS on 56M shares), non‑GAAP net income of $519 million, cash and equivalents of $370 million with zero debt, ~39,200 clients, 7.4 million employee records, a 91% annual revenue retention rate, and ~1.7 million shares repurchased (~$370 million) with ~$1.1 billion remaining under the buyback authorization; buybacks are being treated opportunistically and are not baked into the guide.Paycom Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
86
Very Positive
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.05B | 1.88B | 1.69B | 1.38B | 1.06B |
| Gross Profit | 1.61B | 1.55B | 1.42B | 1.16B | 893.64M |
| EBITDA | 799.10M | 798.30M | 588.20M | 484.80M | 323.18M |
| Net Income | 453.40M | 502.00M | 340.79M | 281.39M | 195.96M |
Balance Sheet | |||||
| Total Assets | 7.60B | 5.86B | 4.20B | 3.90B | 3.22B |
| Cash, Cash Equivalents and Short-Term Investments | 370.00M | 402.00M | 294.00M | 400.73M | 277.98M |
| Total Debt | 152.20M | 83.40M | 75.90M | 29.00M | 29.16M |
| Total Liabilities | 5.87B | 4.28B | 2.89B | 2.72B | 2.32B |
| Stockholders Equity | 1.73B | 1.58B | 1.30B | 1.18B | 893.71M |
Cash Flow | |||||
| Free Cash Flow | 408.00M | 341.00M | 288.21M | 228.31M | 193.17M |
| Operating Cash Flow | 678.90M | 533.90M | 485.04M | 365.10M | 319.36M |
| Investing Cash Flow | -611.20M | -22.20M | -196.71M | -23.29M | -257.67M |
| Financing Cash Flow | 1.02B | 1.11B | -274.66M | 254.59M | 165.72M |
Paycom Technical Analysis
Negative
113.59
Price Trends
125.08
Negative
141.76
Negative
177.54
Negative
Market Momentum
-3.01
Positive
36.15
Neutral
15.81
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAYC, the sentiment is Negative. The current price of 113.59 is below the 20-day moving average (MA) of 121.71, below the 50-day MA of 125.08, and below the 200-day MA of 177.54, indicating a bearish trend. The MACD of -3.01 indicates Positive momentum. The RSI at 36.15 is Neutral, neither overbought nor oversold. The STOCH value of 15.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $6.23B | 19.61 | 26.06% | 0.94% | 9.72% | -2.69% | |
70 Outperform | $5.13B | 41.43 | 20.52% | ― | 13.30% | 2.80% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $4.59B | -21.74 | -13.37% | ― | 24.26% | 55.58% | |
57 Neutral | $3.91B | 77.74 | 31.15% | ― | 22.02% | -55.25% | |
56 Neutral | $717.57M | 61.80 | -13.21% | ― | -2.13% | ― |
* Technology Sector Average
PAYC
Paycom
113.59
-102.92
-47.54%
CVLT
CommVault Systems
88.87
-64.66
-42.12%
PCTY
Paylocity
95.10
-92.30
-49.25%
KC
Kingsoft Cloud Holdings
15.11
1.07
7.62%
PRCH
Porch Group
6.76
1.44
27.07%
Paycom Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Paycom Expands Revolving Credit Facility to Boost Liquidity
Positive
Mar 12, 2026
On March 12, 2026, Paycom Payroll, LLC increased the aggregate commitments under its existing credit agreement by $461.6 million, expanding its senior secured revolving credit facility to $1.46 billion. The core terms of the original July 29, 2022...
Stock Buyback
Paycom Expands Share Repurchase Authorization with Added Funds
Positive
Mar 5, 2026
On March 5, 2026, Paycom Software, Inc.’s board authorized an additional $200 million for repurchases of the company’s common stock under its existing stock buyback plan, partially replenishing the program after Paycom completed roughl...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Paycom Elevates Shane Hadlock to President and CCO
Positive
Feb 19, 2026
On Feb. 18, 2026, Paycom’s board appointed longtime executive Shane Hadlock as president and chief client officer, making him the company’s sole principal operating officer and increasing his base salary to $700,000. Chief Operating Of...
Dividends
Paycom Board Declares Regular Quarterly Cash Dividend
Positive
Feb 10, 2026
On February 10, 2026, Paycom announced that its board declared a regular quarterly cash dividend of $0.375 per share of common stock. The dividend is scheduled to be paid on March 23, 2026, to shareholders of record as of March 9, 2026, underscori...
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.