Morningstar

Paychex Inc PAYX

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Stock XNAS Rating as of
$140.76 −0.03 (0.02%)
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As of Delayed Price Closed

Company Report

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Paychex Earnings: Underlying Fundamentals Robust Despite Program Expiration Headwinds

Emma Williams

We have raised our fair value estimate for wide-moat Paychex to $125 per share from $120 following a reasonable start to fiscal 2025. Paychex continues to benefit from a resilient small- and midsize-business market, despite moderating hiring activity, and robust demand for outsourced HR solutions. Following the fiscal first-quarter results, we lifted our valuation to account for improved near-term profitability assumptions. The shares continue to screen as fairly valued on a risk-adjusted basis.

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Price vs Fair Value

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PAYX is trading at a 433% premium.
Price
$140.76
Fair Value
$294.00
Uncertainty
High
1-Star Price
$765.38
5-Star Price
$57.00
Economic Moat
Cly
Capital Allocation
Wwysgtxtj

Bulls Say, Bears Say

Bulls

Paychex is well placed to benefit from increased regulatory complexity under a US Democratic administration.

Bears

Paychex faces increasing competition from nimble upstarts, legacy peers, and accounting software providers encroaching on the full-service market. This dynamic will likely lead to greater pricing pressure for Paychex and continued elevated investment in software development.

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News

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Trading Information

Previous Close Price
$140.79
Day Range
$138.54–142.04
52-Week Range
$106.27–142.04
Bid/Ask
$140.70 / $141.53
Market Cap
$50.64 Bil
Volume/Avg
3.2 Mil / 1.8 Mil

Key Statistics

Price/Earnings (Normalized)
29.72
Price/Sales
9.59
Dividend Yield (Trailing)
2.66%
Dividend Yield (Forward)
2.78%
Total Yield
2.99%

Company Profile

Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients primarily in the United States. The company, founded in 1971, services over 745,000 clients and pays 1 in 12 US private-sector workers. Alongside its traditional payroll services, Paychex offers HCM solutions such as benefits administration and time and attendance software, as well as human resources outsourcing and insurance agency services.
Sector
Technology
Industry
Software - Application
Stock Style Box
Mid Core
Total Number of Employees
16,500
Website
https://www.paychex.com

Competitors

Valuation

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Metric
PAYX
PCTY
PAYC
Price/Earnings (Normalized)
 29.7225.4221.08
Price/Book Value
 13.168.996.56
Price/Sales
 9.596.795.37
Price/Cash Flow
 23.3721.0216.07
Price/Earnings
PAYX
PCTY
PAYC

Financial Strength

Metric
PAYX
PCTY
PAYC
Quick Ratio
 0.600.140.15
Current Ratio
 1.381.131.13
Interest Coverage
 58.20—294.93
Quick Ratio
PAYX
PCTY
PAYC

Profitability

Metric
PAYX
PCTY
PAYC
Return on Assets (Normalized)
 14.75%8.89%10.71%
Return on Equity (Normalized)
 46.33%38.52%32.24%
Return on Invested Capital (Normalized)
 36.81%36.21%32.09%
Return on Assets
PAYX
PCTY
PAYC

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