/Paychex%20Inc_%20office-by%20Eric%20Glenn%20via%20Shutterstock(1).jpg)
Valued at a market cap of $46.6 billion, Paychex, Inc. (PAYX) provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services. The New York-based company customizes its offering according to the size and structure of the client's business and mainly caters to Small and Medium-sized businesses.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and Paychex fits this criterion perfectly. The company offers its clients an ever-growing variety of payroll and human resource products and services and has over 100 offices serving over 745,000 payroll clients in the U.S. and Europe.
Despite a 2.8% decline from its 52-week high of $133.12, reached on Sep. 3, shares of this payroll service company have gained 6.2% over the past three months, surpassing the Dow Jones Industrials Average’s ($DOWI) 3.8% return over the same time frame.
In the longer term, PAYX stock is up 8.6% on a YTD basis, outpacing DOWI’s 7.1% gains. However, shares of PAYX have gained 7.5% over the past 52 weeks, lagging behind DOWI’s 17.1% return over the same time frame.
Since mid-July, PAYX has been trading above its 200-day and 50-day moving averages, indicating a bullish trend.
Shares of PAYX recovered marginally on Jun. 26 following its Q4 earnings release, which surpassed Wall Street's earnings estimates by 1.8% and met revenue estimates. The better-than-expected performance was driven by growth in revenues from all its segments and higher average interest rates, overshadowing the company’s sluggish EPS growth outlook for the year.
However, PAYX has lagged behind its rival, Automatic Data Processing, Inc.'s (ADP) 15.7% gain on a YTD basis. But Paychex has slightly outpaced ADP’s 7.4% return over the past 52 weeks.
As PAYX has underperformed the broader market over the past year, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from the 18 analysts covering the stock, and as of writing, the stock is trading above its mean price target of $121.47.
On the date of publication, Sohini Mondal 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.
