PAYX Paychex, Inc. - Fundamental Analysis
At a glance
Key valuation, profitability, growth, and risk metrics.
AI Analysis
Powered by advanced machine learning algorithms
Key Strengths
Key Risks
Performance Snowflake
Multi-dimensional analysis across 5 key categories
PAYX appears reasonably valued versus the bloated sector average P/E of 126x, but is rich relative to closer peers like ROP (30.96x P/E) and NXPI (24.39x), especially given weaker earnings momentum.
- P/E of 25.13x is reasonable relative to long-term earnings power and below hyper-growth tech peers
- Forward P/E of 21.19x suggests some de-rating already priced in
- Price/Sales of 6.96x is high for a mature software firm with single-digit EPS growth
- Lack of EV/EBITDA and ROIC data limits full valuation depth
Despite solid revenue momentum, the disconnect between top-line growth and bottom-line contraction—amid a weakening macro environment—casts doubt on near-term EPS inflection, while price trends remain deeply negative over 6M and 1Y horizons.
- Revenue growth of 16.80% YoY indicates continued client acquisition and upsell success
- Analyst target of $134.29 implies 20% upside, suggesting confidence in recovery
- Earnings growth of -10.2% YoY raises concerns about cost structure or interest rate sensitivity
- Q/Q earnings growth also negative, indicating persistent pressure
PAYX has a strong historical track record of execution and margin discipline, but recent share price underperformance and weakening earnings surprises suggest a shift in market perception despite stable operational delivery.
- Consistently beats earnings estimates: 22 of last 25 quarters at or above expectations
- Long-term profitability metrics (ROE 41.27%, ROA 10.81%) demonstrate capital efficiency
- Recent quarters show declining surprise magnitude, with two misses in last four
- 1Y and 6M price returns (-20.7%, -26.9%) reflect deteriorating investor sentiment
Leverage is in line with sector norms, but low quick ratio raises questions about short-term flexibility, especially if interest-sensitive payroll revenues slow.
- Debt/Equity of 1.26 is manageable and in line with peers like FI (1.21) and NXPI (1.17)
- Operating margins remain robust, supporting cash generation
- Quick ratio of 0.52 indicates potential near-term liquidity pressure
- Missing Total Cash and Debt figures limits full solvency assessment
The dividend provides a compelling income floor, but its high payout ratio—near the 100% threshold—raises red flags about resilience in a downturn, despite current coverage.
- Dividend yield of 3.85% is attractive in current rate environment and exceeds most peers
- Long history of consistent payouts reflects shareholder-friendly policy
- Payout ratio of 92.38% is dangerously high, threatening sustainability if earnings decline further
- No data on dividend growth trend or 5Y average yield limits visibility
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Multi-Horizon Performance vs Peers
Price momentum across 5Y → 1W horizons for PAYX and closest competitors.
| Company | 5Y | 3Y | 1Y | 6M | 1M | 1W |
|---|---|---|---|---|---|---|
|
PAYX
Paychex, Inc.
Primary
|
+38.6% | +0.9% | -20.7% | -26.9% | -11.2% | +0.1% |
|
TEAM
Atlassian Corporation
Peer
|
-19.9% | +7.5% | -39.3% | -31.2% | +1.3% | -3.8% |
|
FICO
Fair Isaac Corporation
Peer
|
+268.0% | +182.5% | -25.0% | -20.9% | +6.4% | +0.1% |
|
FI
Fiserv, Inc.
Peer
|
-42.2% | -36.8% | -69.9% | -62.0% | -47.6% | -0.4% |
|
ROP
Roper Technologies, Inc.
Peer
|
+13.4% | +4.9% | -19.9% | -22.6% | -10.1% | +0.6% |
Positive values indicate cumulative gains over the specified period. Comparables pulled from the same sector to highlight whether momentum is stock-specific or industry-wide.
Historical Performance Trends
Long-term financial metrics and growth patterns
Revenue & Net Income
Profit & Operating Margins
Return on Equity (ROE)
Quarterly Revenue Growth
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability
Profit margins and return metrics
Growth
Revenue and earnings growth rates
Financial Health
Balance sheet strength and liquidity metrics
Quarterly Earnings History
EPS performance vs analyst estimates
Technology Sector Comparison
Similar Companies
Peer comparison within the same industry
| Company | AI Rating | Market Cap | P/E | ROE | Profit Margin | Price | |
|---|---|---|---|---|---|---|---|
|
PAYX
Paychex, Inc.
|
NEUTRAL | $40.34B | 25.13 | 41.3% | 27.9% | $112.1 | |
|
TEAM
Atlassian Corporation
|
NEUTRAL | $39.94B | - | -15.3% | -3.4% | $151.79 | |
|
FICO
Fair Isaac Corporation
|
BULLISH | $41.29B | 65.79 | -% | 32.7% | $1741.37 | |
|
FI
Fiserv, Inc.
|
NEUTRAL | $34.31B | 9.86 | 13.5% | 17.0% | $63.8 | |
|
ROP
Roper Technologies, Inc.
|
BULLISH | $48.38B | 30.96 | 8.2% | 20.3% | $449.5 |
Recent Insider Trading
Insider buy and sell transactions from the last 6 months
| Date | Insider | Position | Transaction | Shares | Value |
|---|---|---|---|---|---|
| 2025-11-12 | GOLISANO B THOMAS | Beneficial Owner of more than 10% of a Class of Security | Gift | 447,256 | $49,834,967 |
| 2025-10-28 | GOLISANO B THOMAS | Beneficial Owner of more than 10% of a Class of Security | Gift | 200 | $24,774 |
| 2025-10-22 | GOLISANO B THOMAS | Beneficial Owner of more than 10% of a Class of Security | Gift | 302,050 | $38,523,457 |
| 2025-10-15 | BONADIO THOMAS F | Director | Stock Award | 725 | - |
| 2025-10-15 | WILSON KARA | Director | Stock Award | 725 | - |
| 2025-10-15 | PRICE KEVIN A | Director | Stock Award | 725 | - |
| 2025-10-15 | PAYTON THERESA M. | Director | Stock Award | 725 | - |
| 2025-10-15 | VELLI JOSEPH M | Director | Stock Award | 725 | - |
| 2025-10-15 | DOODY JOSEPH G | Director | Stock Award | 725 | - |
| 2025-10-15 | JOSEPH PAMELA A. | Director | Stock Award | 725 | - |
| 2025-10-15 | TUCCI JOSEPH M | Director | Stock Award | 725 | - |
| 2025-10-15 | MUCCI MARTIN | Chairman of the Board | Stock Award | 855 | - |
| 2025-09-02 | GOLISANO B THOMAS | Beneficial Owner of more than 10% of a Class of Security | Gift | 736 | $102,643 |
| 2025-07-16 | SCHRADER ROBERT L. | Chief Financial Officer | Sale | 3,160 | $444,391 |
| 2025-07-16 | SIMMONS CHRISTOPHER C | Officer and Treasurer | Sale | 1,843 | $259,826 |
Wall Street Analysts
Professional analyst ratings and price targets