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Paycom Software, Inc. (PAYC), with a market cap of over $15.4 billion, based in Oklahoma City, revolutionizes workforce management with its cloud-based human capital management (HCM) solution. Catering to small and mid-sized U.S. businesses, Paycom streamlines the employment lifecycle - from recruitment to retirement - via intuitive applications.
Its suite covers talent acquisition, payroll, compliance, and analytics, empowering employers with tools like geofencing, performance tracking, and seamless benefits management. By blending innovation and efficiency, Paycom not only simplifies operations but also delivers actionable insights, positioning itself as a leader in the HCM space.
Shares of Paycom Software have jumped 30.6% over the past 52 weeks and 14.6% on a YTD basis, trailing behind the S&P 500 Index’s ($SPX) 31.8% returns over the past year and 25.8% gains in 2024.
Zooming in further, PAYC has also underperformed the First Trust Cloud Computing ETF’s (SKYY) 48.8% returns over the past 52 weeks and 39.6% gains on a YTD basis.
Paycom Software has been on a rollercoaster, but recent signals suggest the ride is headed upward. After battling macroeconomic challenges and the effects of product cannibalization, the company showcased its resilience.
The stock has had an impressive run over the past month, surging 39.4% and jumping over 21.3% after its stellar Q3 earnings report on Oct. 30. Earnings of $1.67 per share and $451.9 million in revenue exceeded Wall Street's expectations.
Paycom's Q4 outlook further bolsters optimism, with projected sales of $477 million to $484 million, outpacing analyst estimates and signaling steady growth. Management's full-year forecast of $1.866 billion to $1.873 billion in sales and a $745 million to $752 million range in EBITDA highlights a solid recovery trajectory. As Paycom reclaims momentum, it’s proving its ability to adapt and thrive.
For the current fiscal year, ending in December, analysts project Paycom software’s EPS to surge 16.6% year over year to $6.88. Moreover, the company's earnings surprise history is impressive. It beat the consensus estimates in each of the past four quarters.
The overall consensus is a “Hold” among the 18 analysts covering PAYC stock. That’s based on two “Strong Buy” ratings and 16 “Holds.”
The overall configuration has been stable over the past few months.
On Nov. 4, Mizuho’s Siti Panigrahi boosted Paycom's price target to $190 from $170, holding its “Neutral” stance. This upgrade follows Paycom’s stronger-than-expected September quarter results, showcasing resilience and growth stabilization despite economic headwinds. The analyst highlighted the company's steady footing as a promising signal for investors navigating uncertain markets.
Although PAYC stock currently trades above the mean price target of $197.92, the Street-high target price of $250 suggests the stock could rally as much as 7% from the current levels.
