Paycom Software, Inc.

Paycom Software, Inc.

PAYCยทNYSE

$137.79

+1.2%
TechnologySoftware - Application

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 Snapshot
Market Cap$7.52B
EPS8.1300
P/E Ratio16.95
Earnings Date08/05/2026

Intrinsic Alpha Methodology

Thesis Lenses

Signal ยท Driver ยท Risk

Signal

High confidence

Valuation 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 confidence

Return 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 confidence

Downside 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.

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Paycom Software, Inc. Market vs Earnings Trajectory

PAYC ยท NYSE

Loading price and EPS data...

Paycom Software, Inc.

Paycom Software, Inc. Fair Value Envelope

PAYC ยท NYSE

Our analysis suggests that PAYC has a fair value of HIDDEN per share in the Base Case projection. With shares currently trading at $137.79, this represents a potential HIDDEN relative to our calculated worth for Paycom Software, Inc..

Intrinsic Value
Current Price: $137.79
3Y+67.0%
5Y+227.0%
10Y+970.0%
3Y+49.0%
5Y+144.0%
10Y+523.0%
3Y+61.0%
5Y+216.0%
10Y+934.0%
3Y+86.0%
5Y+199.0%
10Y+586.0%
3Y+79.0%
5Y+207.0%
10Y+640.0%
3Y+95.0%
5Y+191.0%
10Y+604.0%
Paycom Software, Inc.

Paycom Software, Inc. Profit Bridge

PAYC ยท NYSE
Revenue2.05B
Cost of Goods Sold (439.30M)
Gross Profit1.61B
Operating Expenses (1.05B)
Operating Income567.20M
Interest Expense (3.40M)
Other Income/Expense52.20M
Pretax Income619.40M
Income Tax (166.00M)
Net Income453.40M
Net Income
453.40M

Profitability Analysis

Gross Margin

78.6%

Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.

Operating Margin

27.6%

Outstanding operational efficiency. The company generates substantial profit from core operations.

Net Profit Margin

22.1%

Exceptional profitability. The company converts a significant portion of revenue to bottom-line earnings.

Effective Tax Rate

26.8%

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.

78.59%
Gross Profit Margin
-4%
3Y-7.0%
5Y-8.0%
10Y-6.0%
27.65%
Operating Profit Margin
-18%
3Y-
5Y+25.0%
10Y-11.0%
22.10%
Net Profit Margin
-17%
3Y+8.0%
5Y+30.0%
10Y+66.0%
26.19%
Return on Equity
-18%
3Y+10.0%
5Y+20.0%
10Y-30.0%
5.97%
Return on Assets
-30%
3Y-17.0%
5Y+8.0%
10Y+47.0%
18.38%
Return on Invested Capital
-26%
3Y+3.0%
5Y+14.0%
10Y-62.0%
PAYC

Paycom Software, Inc. Cash Conversion Engine

PAYC ยท NYSE
Net Income453.40M
Depreciation & Amortization176.30M
Stock-Based Compensation0.00
Change in Working Capital-178.40M
Others73.20M
Capital Expenditures-270.90M
Free Cash Flow408.00M

Cash Flow Quality Analysis

FCF Conversion Rate

90.0%

Strong cash conversion. Most reported earnings translate into actual cash flow, suggesting solid fundamentals.

CapEx Intensity

39.9%

Moderate capital requirements typical of many stable businesses. Healthy balance between reinvestment and cash generation.

FCF Growth Trend

+19.6%

Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.

Working Capital Impact

-$178.40M

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.

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Paycom Software, Inc. Funding & Solvency Profile

PAYC ยท NYSE
Cash & Cash Equivalents153.90M
Net Receivables51.30M
Inventory1.50M
Other Current Assets2.87B
Total Current Assets3 B
Property, Plant & Equipment755.20M
Goodwill & Intangible Assets85.90M
Long-Term Investments0.00
Other Non-Current Assets906.70M
Total Non-Current Assets2 B
Total Assets
4.82B

Financial Health Analysis

Current Ratio

1.08x

Acceptable liquidity, but monitor closely. Current assets just barely cover current liabilities.

Debt-to-Equity Ratio

0.32x

Conservative capital structure. The company relies primarily on equity financing, indicating low financial risk.

Working Capital

235 M

Positive working capital, but relatively tight. The company should monitor cash flow carefully.

Asset Composition

64% Current

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.

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Paycom Software, Inc. Street Expectations Map

PAYC ยท NYSE

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.

Lowest Target
115.00
-16.54%
Consensus Target
151.75
10.13%
Highest Target
195.00
41.52%

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

+10.1%

Moderate upside. Analysts expect positive returns but with limited margin of safety. Consider entry timing.

Analyst Agreement

52.7% spread

Mixed analyst views. Wide target range suggests differing opinions on key value drivers, growth prospects, or risk factors.

Risk-Reward Profile

2.51x

Favorable risk-reward. Potential upside significantly exceeds downside risk, offering asymmetric return profile attractive for risk-tolerant investors.

Analyst Conviction

Low

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.

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Paycom Software, Inc. Insider Positioning

PAYC ยท NYSE

During the last 12 months, insiders have sold $7.23M worth of PAYC shares, with no buying activity reported.

3 Months

Bought

0

0.00

Sold

2.5K

351.25K

Net Activity

-351K

-$351K

3-6 Months

Bought

0

0.00

Sold

1.3K

211.46K

Net Activity

-211K

-$211K

6-9 Months

Bought

0

0.00

Sold

1.5K

244.07K

Net Activity

-244K

-$244K

9-12 Months

Bought

0

0.00

Sold

24.2K

6.42M

Net Activity

-6.4M

-$6.42M

Top Buyers

No buying activity

Top Sellers

1
RCR

Richison Chad R.

Director, 10 Percent Owner, Officer: Ceo, President And Chairman

23.3K sharesโ€ข2 transactions

$6.18M

2
PR

Peck Randall

Officer: Chief Operating Officer

4.8K sharesโ€ข3 transactions

$824K

3
FRD

Foster Robert D.

Officer: Chief Financial Officer

1.3K sharesโ€ข1 transactions

$211K

4
SBS

Smith Bradley Scott

Officer: Chief Information Officer

43 sharesโ€ข2 transactions

$10K

Insider Activity Analysis

Net Insider Sentiment

Bearish

Strong bearish signal with $7.23M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.

Buy/Sell Ratio

0.00:1

Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.

Recent Trend (3 Months)

$351K

Heavy recent selling activity. Recent insider sales notably exceed purchasesโ€”may warrant investigation into company developments.

Insider Participation

High Selling

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.

0.29%
Dividend Yield
20%
3Y-
5Y-
10Y-
ย 

payc Dividend History

PAYC
10Y CAGR +0%
Latest $0.375
Annual $1.875
Stable dividend payments
Last Period: +0%