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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
10/09/2026: PAYC (2-star) has a low Upturn Star Rating. Not recommended to BUY.
Paycom Software, Inc. is a cloud-based HCM provider specializing in a unified platform for payroll and HR management. Its core strength lies in its single-database architecture, which helps clients minimize data errors compared to fragmented systems. The company's primary growth story centers on increasing the adoption of its automated Beti payroll technology to drive client retention and efficiency. Investors should monitor competitive pressures from larger HCM incumbents and the company's ability to maintain high margins in a maturing software market. The stock may suit growth-oriented investors, though it carries risks related to high valuation volatility and the potential for slowing software adoption.
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 | Mixed fit | While the company has a strong product, its growth rate has moderated, necessitating a reassessment of its high-growth classification. |
| Momentum investor | Weak fit | The stock has experienced significant volatility and currently lacks the consistent upward trend required for pure momentum strategies. |
| Value investor | Mixed fit | The company's valuation has become more reasonable compared to historical peaks, though it remains a premium software play. |
| Dividend investor | Weak fit | Paycom does not pay a dividend, making it unsuitable for income-focused portfolios. |
| Low-risk investor | Weak fit | The high volatility of the stock price and exposure to competitive software risks make it unsuitable for conservative investors. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | High | The stock has historically shown significant swings in response to earnings reports and growth guidance revisions. |
| Valuation risk | Medium / high | As a high-multiple software company, any contraction in market sentiment toward SaaS can disproportionately impact the stock price. |
| Competition risk (HCM software rivalry) | High | Fighting for market share against massive, well-capitalized incumbents like ADP limits pricing power. |
| Business quality | Strong | The company's subscription-based revenue model and high retention rates indicate strong fundamental business quality. |
| Dividend income | Low / none | Investors receive no cash distributions and must rely entirely on capital appreciation. |
| Execution risk | Medium | The shift toward newer self-service models like Beti requires successful ongoing adoption by the existing client base. |
Price Behavior
Strong Uptrend
The stock has maintained a strong upward price trend across the last three quarters.
Moderately Choppy
The stock has experienced noticeable price swings while retaining some directional structure.
Analysis of Past Performance
Type Stock | Historic Profit 42.66% | Avg. Invested days 41 | 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 10/09/2026 |
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 10.47B USD | Price to earnings Ratio 24.57 | 1Y Target Price 220.24 |
Price to earnings Ratio 24.57 | 1Y Target Price 220.24 | ||
Volume (30-day avg) 698.6K shares | Beta 0.83 | 52 Weeks Range 104.15 - 244.98 | Updated Date 10/10/2026 |
52 Weeks Range 104.15 - 244.98 | Updated Date 10/10/2026 | ||
Dividends yield (FY) 0.65% | Basic EPS (TTM) 9.45 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| Recurring Subscription Revenues | Fees for accessing the Paycom HCM software platform on a per-employee, per-month basis. | The vast majority of revenue is recurring, which provides predictable and stable cash flow. |
| Ancillary Services | Additional fees for specific services like background checks, tax credits, or garnishment processing. | These services act as cross-selling opportunities to increase revenue per client. |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Valuation
Trailing PE 24.57 | Forward PE 16.72 | Enterprise Value 10.78B | Price to Sales(TTM) 4.89 |
Enterprise Value 10.78B | Price to Sales(TTM) 4.89 | ||
Enterprise Value to Revenue 5.03 | Enterprise Value to EBITDA 12.03 | Shares Outstanding 45.07M | Shares Floating 37.54M |
Shares Outstanding 45.07M | Shares Floating 37.54M | ||
Percent Insiders 14.07 | Percent Institutions 95.34 |
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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