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Upturn AI Summary - About
Paycom Software, Inc.(PAYC)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for PAYC
10/23/2026: PAYC (2-star) has a low Upturn Star Rating. Not recommended to BUY.
Paycom Software is a specialized cloud-based provider of human capital management software, focusing on automating payroll and HR processes for mid-market businesses. Its core strength lies in its unified, single-database architecture and its unique employee-driven payroll product, Beti. The company's primary growth opportunity remains increasing software penetration among current and new clients through its direct-sales model. Key risks include intense competition from larger industry incumbents, exposure to US economic trends that affect hiring, and significant valuation sensitivity. The stock typically suits growth investors with a higher risk tolerance, and key developments to monitor include customer adoption rates of automated modules and ongoing operating margin trends.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
Company fundamentals, valuation, risks, and news provide supporting context about the business.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Strong fit | The company maintains high margins and historically strong revenue growth trends. |
| Momentum investor | Mixed fit | Momentum is highly conditional on the stock's ability to maintain high growth rates and premium valuation multiples. |
| Value investor | Weak fit | The stock often trades at a premium multiple, which may not align with traditional value criteria. |
| Dividend investor | Weak fit | Paycom does not pay a dividend, focusing instead on growth and reinvestment. |
| Low-risk investor | Weak fit | High valuation sensitivity and competitive pressures lead to significant stock price volatility. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | High | High-growth software stocks are subject to sharp price fluctuations based on earnings reports and interest rate sentiment. |
| Valuation risk | Medium / high | Investors pay a premium for growth, and any deceleration in revenue growth can lead to significant P/E compression. |
| Competition risk (AI/Cloud) | High | Established competitors like ADP and Workday are heavily investing in AI to protect their large market shares. |
| Business quality | Strong | The company provides a sticky, essential B2B service with high switching costs once implemented. |
| Dividend income | Low / none | The company is a growth vehicle that does not provide income through dividends. |
| Execution risk | Medium | The strategy relies on successful adoption of automation products and continued sales force performance. |
Price Behavior
Hockey-Stick Growth
The stock demonstrates a Hockey-Stick Growth price path pattern.
Moderately Choppy
The stock has experienced noticeable price swings while retaining some directional structure.
Analysis of Past Performance
Type Stock | Historic Profit 68.69% | Avg. Invested days 43 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Advisory Rating  | Upturn Advisory Performance  2.0 | Stock Returns Performance  3.0 |
| Profits based on simulation | Last Close 10/23/2026 |
Upturn Scorecard
Upturn Star Rating 
Company Fundamentals
Financial Health Rating
Growth Momentum Score
Ownership
Top 5 Institutional Investors
Unit Economics (Per $1K Revenue)
Economic Dimensions
Quantitative Style Profile
Style Classification
Quality Focused
Key Highlights
Company Size Large-Cap Stock | Market Capitalization 12.38B USD | Price to earnings Ratio 28.84 | 1Y Target Price 227 |
Price to earnings Ratio 28.84 | 1Y Target Price 227 | ||
Volume (30-day avg) 676.9K shares | Beta 0.83 | 52 Weeks Range 104.15 - 275.22 | Updated Date 10/24/2026 |
52 Weeks Range 104.15 - 275.22 | Updated Date 10/24/2026 | ||
Dividends yield (FY) 0.55% | Basic EPS (TTM) 9.52 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| Recurring Revenue | Subscription-based fees for access to the core HCM platform and payroll services. | The company primarily makes money through monthly or annual subscription fees from businesses using their software. |
| Ancillary Services | Implementation fees, tax filing services, and background check charges. | Additional revenue is generated from set-up and specialized HR services provided to clients. |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Valuation
Trailing PE 28.84 | Forward PE 20.16 | Enterprise Value 10.88B | Price to Sales(TTM) 5.78 |
Enterprise Value 10.88B | Price to Sales(TTM) 5.78 | ||
Enterprise Value to Revenue 5.55 | Enterprise Value to EBITDA 14.89 | Shares Outstanding 45.07M | Shares Floating 37.54M |
Shares Outstanding 45.07M | Shares Floating 37.54M | ||
Percent Insiders 14.07 | Percent Institutions 95.75 |
Financial Metrics
🧭 Investment Snapshot
Total Revenue (Scale)
Total money earned from selling products or services before any costs. It is needed to understand the scale of the business and its ability to generate income.
Net Income (Profit)
Final profit after all expenses, interest, and taxes are deducted. It is needed to determine the overall profitability available to shareholders.
Free Cash Flow (Cash Strength)
Cash remaining after operating activities and capital expenditures, showing cash available for growth. It is needed to evaluate the company’s ability to invest, pay dividends, or reduce debt.
📈 Growth & Strength
Operating Income (Core Profit)
Profit from core operations after deducting all operating expenses. It is needed to measure how efficiently the company runs its primary business activities.
EBITDA (Cash Earnings)
Earnings before interest, taxes, depreciation, and amortization, indicating operating cash potential. It is needed to compare operating performance across companies without accounting or financing differences.
Gross Profit (Unit Profitability)
Revenue minus cost of revenue, showing profit after direct production costs. It is needed to evaluate core business profitability before overhead expenses.
🛡️ Financial Safety
Cash (Liquidity Buffer)
Total cash and cash equivalents on hand. It is needed to evaluate immediate liquidity and financial flexibility.
Total Debt (Leverage Risk)
Total debt including both short-term and long-term components. It is needed to assess the company’s leverage and financial risk.
Net Working Capital (Short-Term Health)
Current assets minus current liabilities, indicating short-term liquidity strength. It is needed to assess whether the company can meet its short-term obligations.
🧱 Balance Sheet Strength
Stockholder Equity (Net Worth)
Total equity value held by shareholders. It is needed to understand the net worth of the company from the owners’ perspective.
Total Assets (Asset Base)
The full value of everything the company owns, including cash, inventory, equipment, and investments. It is needed to understand the resource base used to generate revenue.
Income Before Tax (Pre-Tax Earnings)
Income before provision for income taxes. It is needed to analyze profitability independent of tax structures.
⚙️ Cost & Drag Factors
Cost of Revenue (Production Cost)
Direct costs required to produce and deliver the products or services sold. It is needed to assess efficiency in production and service delivery.
Total Operating Expenses (Operating Cost)
Indirect costs of running the business such as salaries, marketing, and administration. It is needed to understand how much it costs to sustain ongoing business operations.
Income Tax Expense (Tax Drag)
Amount of taxes paid or payable to the government. It is needed to evaluate the impact of taxation on overall profitability.
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