Paycom Software, Inc.
$137.79
+1.2%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.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is mid-range (P/E 16.9).
Valuation inputs: P/E 16.9, earnings yield +5.9%, momentum +1.2%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is strong (ROE +26.2%, ROIC +18.4%).
Profitability stack: net margin +22.1%, ROE +26.2%, ROIC +18.4%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile looks controlled across current risk inputs.
Risk factors: liabilities/assets +77.2%, momentum +1.2%, net margin +22.1%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Paycom Software, Inc. Market vs Earnings Trajectory
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Paycom Software, Inc. Fair Value Envelope
Paycom Software, Inc. Profit Bridge
Profitability Analysis
Gross Margin
Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.
Operating Margin
Outstanding operational efficiency. The company generates substantial profit from core operations.
Net Profit Margin
Exceptional profitability. The company converts a significant portion of revenue to bottom-line earnings.
Effective Tax Rate
Higher tax burden may reflect limited tax optimization or operations in high-tax jurisdictions.
Profitability Insight
Exceptional profitability across all levels: Strong pricing power, efficient operations, and healthy bottom line indicate a high-quality business with sustainable competitive advantages.
Paycom Software, Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Strong cash conversion. Most reported earnings translate into actual cash flow, suggesting solid fundamentals.
CapEx Intensity
Moderate capital requirements typical of many stable businesses. Healthy balance between reinvestment and cash generation.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Moderate working capital outflow. Typical for growing businesses, but ensure it's supporting revenue growth, not inefficiency.
Cash Flow Quality Insight
Working capital strain: Significant cash tied up in operations. Monitor receivables collection, inventory turns, and payment terms to optimize cash conversion cycle.
Paycom Software, Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Acceptable liquidity, but monitor closely. Current assets just barely cover current liabilities.
Debt-to-Equity Ratio
Conservative capital structure. The company relies primarily on equity financing, indicating low financial risk.
Working Capital
Positive working capital, but relatively tight. The company should monitor cash flow carefully.
Asset Composition
Asset-light business model with high liquidity. Majority of assets are easily convertible to cash.
Financial Health Insight
Conservative with tight liquidity: Low debt is positive, but current ratio warrants attention. Consider whether the company is efficiently deploying its equity capital.
Paycom Software, Inc. Street Expectations Map
Wall Street analysts project that PAYC stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 151.75, with estimates ranging from a low of 115.00 to a high of 195.00.
The consensus 1-year price target stands at 151.75, with estimates ranging from a low of 115.00 to a high of 195.00.
Analyst Consensus Analysis
Upside Potential
Moderate upside. Analysts expect positive returns but with limited margin of safety. Consider entry timing.
Analyst Agreement
Mixed analyst views. Wide target range suggests differing opinions on key value drivers, growth prospects, or risk factors.
Risk-Reward Profile
Favorable risk-reward. Potential upside significantly exceeds downside risk, offering asymmetric return profile attractive for risk-tolerant investors.
Analyst Conviction
Bearish or uncertain outlook. Limited upside or poor consensus suggests challenges ahead or fundamental concerns.
Market Sentiment Insight
Asymmetric upside: Strong return potential with favorable risk-reward profile. The limited downside relative to upside makes this an attractive risk-adjusted opportunity for growth-oriented portfolios.
Paycom Software, Inc. Insider Positioning
During the last 12 months, insiders have sold $7.23M worth of PAYC shares, with no buying activity reported.
3 Months
0
0.00
2.5K
351.25K
-351K
-$351K
3-6 Months
0
0.00
1.3K
211.46K
-211K
-$211K
6-9 Months
0
0.00
1.5K
244.07K
-244K
-$244K
9-12 Months
0
0.00
24.2K
6.42M
-6.4M
-$6.42M
Top Buyers
No buying activity
Top Sellers
Richison Chad R.
Director, 10 Percent Owner, Officer: Ceo, President And Chairman
$6.18M
Peck Randall
Officer: Chief Operating Officer
$824K
Foster Robert D.
Officer: Chief Financial Officer
$211K
Smith Bradley Scott
Officer: Chief Information Officer
$10K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $7.23M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchasesโmay warrant investigation into company developments.
Insider Participation
4 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.
Insider Activity Insight
Multiple red flags: Heavy selling, numerous sellers, and continued recent selling create a concerning pattern. Investigate fundamental drivers and consider whether company guidance or industry conditions have deteriorated.
payc Dividend History
Learning Layer
Related Guides
Build conviction on PAYC by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.