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Headquartered in Rochester, New York, Paychex, Inc. (PAYX) provides payroll, human resources, and benefits outsourcing solutions with a market cap of $45.73 billion. Specializing in workforce management, Paychex plays a crucial role in helping businesses of all sizes efficiently manage their payroll and HR needs. The company operates a comprehensive network of service centers, catering to a diverse client base, including small and medium-sized businesses, ensuring innovative and reliable solutions for various human capital management requirements.
Shares of PAYX have underperformed the broader market considerably over the past year. The stock has gained 5.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.8%. Also, in 2024, PAYX is up 6.7%, compared to SPX’s 17.8% rise on a YTD basis.
Narrowing the focus, PAYX’s underperformance is also evident compared to the Industrial Select Sector SPDR Fund (XLI). The exchange-traded fund has gained 20.8% over the past year. The ETF’s 12.4% returns on a YTD basis are also ahead of the stock’s gain over the same time frame.
PAYX reported Q4 earnings on Jun. 26. The company reported a profit of $379.9 million, or $1.12 per share, surpassing Wall Street expectations of $1.10 per share. However, the company's revenue of $1.30 billion matched the analysts’ estimates. The stock gained 1.4% on the earnings release day.
For the current fiscal year, ending in May 2025, analysts expect PAYX’s EPS to grow 5.7% year over year to $4.99 on a diluted basis. The company's earnings surprise history is impressive. It beat the consensus estimate in the last four quarters.
Among the 18 analysts covering PAYX stock, the consensus rating is a “Hold.” That’s based on 15 “Hold” ratings, one “Moderate Sell,” and two “Strong Sells.”
On Jun. 27, David Grossman from Stifel Nicolaus maintained a “Hold” rating on Paychex, with a price target of $130—the Street-high price target, implying a potential upside of 2.3% from current levels. The mean price target of $120.93 indicates that the stock trades at a premium.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
