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Oklahoma City-based Paycom Software, Inc. (PAYC) provides cloud-based human capital management (HCM) solutions delivered as software-as-a-service for small to mid-sized companies. Valued at $9.47 billion by market cap, the company offers data analytical software products to manage the employment life cycle from recruitment to retirement. The leading HCM software provider is expected to announce its fiscal second-quarter earnings for 2024 after the market closes on Wednesday, Jul. 31.
Ahead of the event, analysts expect PAYC to report a profit of $1.13 per share on a diluted basis, up 11.9% from $1.01 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing on another occasion.
For the full year, analysts expect PAYC to report EPS of $6.36, up 7.8% from $5.90 in fiscal 2023.
PAYC stock has significantly underperformed the S&P 500’s ($SPX) 14.1% gains on a YTD basis, with shares down 21.5% during this period. Similarly, it underperformed the S&P 500 Technology Sector SPDR’s (XLK) 12.1% gains over the same time frame.
On May 2, PAYC shares closed down more than 10% after forecasting Q2 revenue to be between $434 million and $438 million, weaker than the consensus estimates of $442.20 million. The company reported its Q1 results on May 1, with adjusted EPS of $2.59, surpassing Wall Street expectations of $2.43.
The company’s revenue was $499.90 million, topping Wall Street forecasts of $495.90 million. For Q2, PAYC expects adjusted EBITDA to be between $151 million and $155 million. The company expects full-year revenue to be between $1.86 billion and $1.89 billion and adjusted EBITDA to be between $720 million to $730 million. PAYC shares have been on a downtrend since the day the results were released.
Analysts’ consensus opinion on PAYC stock is neutral, with a “Hold” rating overall. Out of 19 analysts covering the stock, two advise a “Strong Buy” rating, and 17 give a “Hold.” The average analyst price target for PAYC is $175.38, indicating a potential upside of 7.7% from the current levels.
On the date of publication, Dipanjan Banchur 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.
