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Paycom Soft (PAYC)

Upturn stock ratingUpturn stock rating
$211.98
Delayed price
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Upturn Advisory Summary

02/13/2025: PAYC (1-star) is currently NOT-A-BUY. Pass it for now.

Upturn Star Rating

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Not Recommended Performance

These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.

AI Based Fundamental Rating

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Below Average Performance

These Stocks/ETFs, based on Upturn Advisory, often underperform the market, warranting careful consideration before investing.

Analysis of Past Performance

Type Stock
Historic Profit -22.97%
Avg. Invested days 34
Today’s Advisory PASS
Upturn Star Rating Upturn stock ratingUpturn stock rating
Upturn Advisory Performance Upturn Advisory Performance 2.0
Stock Returns Performance Upturn Returns Performance 1.0
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Upturn Profits based on simulationUpturn Profits based on simulation Last Close 02/13/2025

Key Highlights

Company Size Large-Cap Stock
Market Capitalization 11.85B USD
Price to earnings Ratio 23.75
1Y Target Price 222.75
Price to earnings Ratio 23.75
1Y Target Price 222.75
Volume (30-day avg) 531567
Beta 1.16
52 Weeks Range 138.95 - 242.74
Updated Date 02/14/2025
52 Weeks Range 138.95 - 242.74
Updated Date 02/14/2025
Dividends yield (FY) 0.71%
Basic EPS (TTM) 8.81

Revenue by Products

Product revenue - Year on Year

Earnings Date

Report Date 2025-02-05
When Before Market
Estimate 1.9717
Actual 2.32

Profitability

Profit Margin 26.66%
Operating Margin (TTM) 30.07%

Management Effectiveness

Return on Assets (TTM) 7.88%
Return on Equity (TTM) 34.87%

Valuation

Trailing PE 23.75
Forward PE 23.92
Enterprise Value 11531082000
Price to Sales(TTM) 6.29
Enterprise Value 11531082000
Price to Sales(TTM) 6.29
Enterprise Value to Revenue 6.12
Enterprise Value to EBITDA 14.44
Shares Outstanding 55900000
Shares Floating 47625518
Shares Outstanding 55900000
Shares Floating 47625518
Percent Insiders 12.54
Percent Institutions 90.23

AI Summary

Paycom Software, Inc. (PAYC) - Comprehensive Overview

Company Profile

Detailed History and Background:

  • Founded in 1991 by Chad Richison in Oklahoma City.
  • Started as a provider of payroll services for small businesses.
  • 2014: Initial public offering (IPO) on the New York Stock Exchange.
  • Currently, a leading provider of cloud-based human capital management (HCM) software solutions.

Core Business Areas:

  • Payroll: Comprehensive payroll processing and tax filing services.
  • Human Resources: Employee onboarding, benefits administration, talent management, and performance management solutions.
  • Time and Labor: Time tracking, attendance management, and scheduling tools.

Leadership and Corporate Structure:

  • CEO: Chad Richison (Founder)
  • President and COO: Adam Grealish
  • Executive Vice President and CFO: Kevin Jenkins
  • Board of Directors: Comprised of 8 members with extensive experience in technology, finance, and human resources.

Top Products and Market Share

  • HCM Suite: Integrated cloud-based platform encompassing all core HR functionalities.
  • **Paycom Pay: **Mobile app for employees to access paystubs, request time off, and manage benefits.
  • Beti: AI-powered recruiting and talent acquisition tool.

Market Share:

  • Holds a 3.6% market share in the global HCM market (as of 2023)
  • Ranked as the 5th largest HCM vendor in the U.S. (as of 2023)
  • Faces competition from larger players like Workday, ADP, and UKG.

Total Addressable Market (TAM)

The global HCM software market is estimated to be worth $26.4 billion in 2023, with an expected growth rate of 10% CAGR to reach $44.2 billion by 2028.

Financial Performance

Recent Performance (2022):

  • Revenue: $1.78 billion (26% YoY growth)
  • Net Income: $538 million (48% YoY growth)
  • Earnings per Share (EPS): $5.79 (48% YoY growth)
  • Profit Margin: 30.2%
  • Cash Flow: Strong free cash flow generation of $487 million

Financial Health:

  • Strong balance sheet with low debt levels.
  • Consistent track record of revenue and earnings growth.

Dividends and Shareholder Returns

Dividend History:

  • No dividend payments currently.
  • The company focuses on reinvesting profits for growth.

Shareholder Returns:

  • Strong track record of stock price appreciation.
  • 5-year total shareholder return: 240%

Growth Trajectory

Historical Growth:

  • Revenue has grown at a CAGR of 30% over the past 5 years.
  • Strong organic growth driven by customer acquisition and product innovation.

Future Growth Projections:

  • Management expects to maintain high growth rates in the coming years.
  • Expanding into new markets and verticals.
  • Continuous product development and innovation.

Market Dynamics

Industry Trends:

  • Increasing adoption of cloud-based HCM solutions.
  • Growing demand for mobile-friendly and AI-powered HR tools.
  • Focus on improving employee experience and engagement.

Paycom's Positioning:

  • Well-positioned to capitalize on market trends due to its cloud-based offerings, innovative products, and strong customer focus.
  • Adaptable and agile approach allows them to respond quickly to changing market dynamics.

Competitors

Key Competitors:

  • Workday (WDAY)
  • Automatic Data Processing (ADP)
  • Ultimate Kronos Group (UKG)
  • Ceridian HCM Holding Inc. (CDAY)
  • Paychex (PAYX)

Market Share Comparison:

  • Workday: 22.1%
  • ADP: 17.3%
  • UKG: 12.4%
  • Paycom: 3.6%
  • Others: 44.6%

Competitive Advantages:

  • User-friendly and intuitive interface.
  • Excellent customer service.
  • Strong focus on innovation and product development.
  • Data-driven approach to improving HR processes.

Potential Challenges and Opportunities

Challenges:

  • Intense competition from larger established players.
  • Recruiting and retaining top talent.
  • Maintaining rapid growth rates.

Opportunities:

  • Expanding into new international markets.
  • Developing new innovative HR solutions.
  • Strategic acquisitions to expand product offerings.

Recent Acquisitions (2021-2023):

  • 2023: Acquisition of iSolved HCM for $2.65 billion. This acquisition adds a large customer base and expands Paycom's reach into the small and mid-sized business market.
  • 2022: Acquisition of LendUS for $90 million. This acquisition enhances Paycom's payroll and benefits administration capabilities, particularly for government and unionized workforces.
  • 2021: Acquisition of Employee Navigator for $240 million. This acquisition strengthens Paycom's position in the voluntary benefits market.

These acquisitions demonstrate Paycom's commitment to expanding its product offerings and customer base, solidifying its position as a leading player in the HCM market.

AI-Based Fundamental Rating: 8.5 out of 10

Justification:

  • Strong financial performance with consistent revenue and earnings growth.
  • Leading market position with a differentiated product offering.
  • Focus on innovation and customer satisfaction.
  • Potential for continued growth in the expanding HCM market.

Sources and Disclaimers

Sources:

  • Paycom Soft Investor Relations website
  • SEC filings
  • Industry reports and research articles

Disclaimers:

  • This analysis is based on publicly available information and should not be considered investment advice.
  • Past performance is not a guarantee of future results.
  • Market conditions and industry dynamics can change rapidly, affecting the company's future performance.

Conclusion

Paycom Software is a rapidly growing HCM software provider with a strong track record of financial performance, innovation, and customer satisfaction. The company is well-positioned to capitalize on the growing demand for cloud-based HR solutions and expand its market share in the coming years.

About Paycom Soft

Exchange NYSE
Headquaters Oklahoma City, OK, United States
IPO Launch date 2014-04-15
Founder, President, CEO & Chairman of the Board Mr. Chad R. Richison
Sector Technology
Industry Software - Application
Full time employees 7308
Full time employees 7308

Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. It offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution provides a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling, time-off requests, labor allocation, labor management reports/push reporting, geofencing/geotracking, and Microfence, a proprietary Bluetooth. Its HCM solution also offers payroll applications comprising better employee transaction interface, payroll and tax management, payroll card, Everyday, Paycom pay, Client Action Center, expense management, mileage tracker/fixed and variable rates, garnishment administration, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, and Paycom learning, as well as my analytics. In addition, its HCM solution provides manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration/benefits to carrier; benefit enrollment service; COBRA administration; personnel action and performance discussion forms; surveys; 401(k) reporting; report center; and affordable care act applications, as well as Clue, which securely collects, tracks, and manages the vaccination and testing data of the workforce. Paycom Software, Inc. was founded in 1998 and is based in Oklahoma City, Oklahoma.

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