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Paychex Inc (PAYX)PAYX

Upturn stock ratingUpturn stock rating
Paychex Inc
$145.45
Delayed price
Profit since last BUY16.43%
Consider higher Upturn Star rating
upturn advisory
BUY since 89 days
  • BUY Advisory
  • Profitable SELL
  • Loss-Inducing SELL
  • Profit
  • Loss ​
  • PASS (Skip invest)*​ ​
Upturn Stock infoUpturn Stock info Stock price based on last close
*as per simulation
(see disclosures)
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  • ALL
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Upturn Advisory Summary

12/02/2024: PAYX (1-star) has a low Upturn Star Rating. Not recommended to BUY.

Analysis of Past Performance​

Type: Stock
Upturn Star Rating​ Upturn stock ratingUpturn stock rating
Today’s Advisory: Consider higher Upturn Star rating
Historic Profit: -2.69%
Upturn Advisory Performance Upturn Advisory Performance2
Avg. Invested days: 35
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Stock Returns Performance Upturn Returns Performance 1
Last Close 12/02/2024
Type: Stock
Today’s Advisory: Consider higher Upturn Star rating
Historic Profit: -2.69%
Avg. Invested days: 35
Upturn Star Rating​ Upturn stock ratingUpturn stock rating
Stock Returns Performance Upturn Returns Performance 1
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Upturn Profits based on simulationUpturn Profits based on simulation Last Close 12/02/2024
Upturn Advisory Performance Upturn Advisory Performance2

Key Highlights

Company Size Large-Cap Stock
Market Capitalization 52.35B USD
Price to earnings Ratio 31.08
1Y Target Price 134.19
Dividends yield (FY) 2.70%
Basic EPS (TTM) 4.68
Volume (30-day avg) 1520268
Beta 0.99
52 Weeks Range 112.14 - 150.71
Updated Date 12/2/2024
Company Size Large-Cap Stock
Market Capitalization 52.35B USD
Price to earnings Ratio 31.08
1Y Target Price 134.19
Dividends yield (FY) 2.70%
Basic EPS (TTM) 4.68
Volume (30-day avg) 1520268
Beta 0.99
52 Weeks Range 112.14 - 150.71
Updated Date 12/2/2024

Earnings Date

Report Date -
When -
Estimate -
Actual -
Report Date -
When -
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Actual -

Profitability

Profit Margin 31.98%
Operating Margin (TTM) 41.46%

Management Effectiveness

Return on Assets (TTM) 12.03%
Return on Equity (TTM) 45.67%

Revenue by Products

Revenue by Products - Current and Previous Year

Valuation

Trailing PE 31.08
Forward PE 29.15
Enterprise Value 52011283531
Price to Sales(TTM) 9.86
Enterprise Value to Revenue 9.79
Enterprise Value to EBITDA 21.34
Shares Outstanding 359897984
Shares Floating 321266567
Percent Insiders 10.65
Percent Institutions 80.35
Trailing PE 31.08
Forward PE 29.15
Enterprise Value 52011283531
Price to Sales(TTM) 9.86
Enterprise Value to Revenue 9.79
Enterprise Value to EBITDA 21.34
Shares Outstanding 359897984
Shares Floating 321266567
Percent Insiders 10.65
Percent Institutions 80.35

Analyst Ratings

Rating 2.84
Target Price 119.92
Buy -
Strong Buy 1
Hold 14
Sell 3
Strong Sell 1
Rating 2.84
Target Price 119.92
Buy -
Strong Buy 1
Hold 14
Sell 3
Strong Sell 1

AI Summarization

Paychex Inc.: A Comprehensive Overview

Company Profile

History and Background: Paychex Inc. (NASDAQ: PAYX) traces its roots back to 1971 when Thomas Golisano founded the company in Rochester, New York. Starting with just $3,000, Golisano built Paychex into a leading provider of payroll, human resources (HR), retirement, and insurance solutions for businesses of all sizes. The company went public in 1983 and has grown through both organic expansion and strategic acquisitions.

Core Business Areas: Paychex's core business revolves around providing integrated HR, payroll, and administrative solutions. These solutions include payroll processing, tax filing, employee benefits administration, HR administration, and retirement services. They cater to a diverse range of clients, from small businesses to large enterprises across various industries.

Leadership and Corporate Structure: As of November 2023, Paychex is led by Martin Mucci as its Chairman and CEO. The company operates through a decentralized structure, with regional offices and service centers across the United States. Its Board of Directors comprises experienced industry leaders and financial experts.

Top Products and Market Share

Top Products: Paychex's top products include:

  • Paychex Flex: A cloud-based payroll and HR software solution for small and medium-sized businesses.
  • Paychex Pro: A comprehensive payroll and HR solution for larger organizations.
  • Paychex Retirement Services: A suite of retirement savings and administration services.
  • Paychex Insurance Services: A range of insurance products, including health, dental, vision, and disability insurance.

Market Share: Paychex boasts a significant market share in the payroll and HR services industry. It holds approximately 16% of the U.S. payroll services market, placing it as the second-largest player after ADP.

Product Performance: Paychex's products are generally well-received by customers, with high ratings for ease of use, customer support, and functionality. The company consistently invests in product innovation and development to maintain its competitive edge.

Total Addressable Market

The total addressable market (TAM) for Paychex is vast, encompassing all businesses requiring payroll, HR, and administrative support. This includes approximately 30 million small and medium-sized businesses (SMBs) in the United States alone.

Financial Performance

Recent Financial Statements: Paychex's recent financial statements (as of November 2023) show strong financial performance. Its revenue for the fiscal year 2023 was $4.78 billion, with a net income of $914.8 million. The company's profit margin stands at 19.1%, and its EPS is $4.77.

Year-over-Year Comparison: Paychex has demonstrated consistent year-over-year growth in its financial performance. Revenue has increased by 8% compared to the previous year, while net income has grown by 12%.

Cash Flow and Balance Sheet: Paychex maintains a healthy cash flow and balance sheet. Its operating cash flow for the fiscal year 2023 was $1.38 billion, and it has minimal debt obligations.

Dividends and Shareholder Returns

Dividend History: Paychex has a consistent history of paying dividends, with a current annual dividend yield of 2.5%. The company has increased its dividend payout for 50 consecutive years, making it a Dividend Aristocrat.

Shareholder Returns: Paychex has delivered strong shareholder returns over various timeframes. Over the past year, its stock has returned 15%, and over the past five and ten years, it has returned 75% and 225%, respectively.

Growth Trajectory

Historical Growth: Paychex has experienced consistent growth over the past five to ten years. Its revenue has grown at a compound annual growth rate (CAGR) of 7%, and its earnings per share have grown at a CAGR of 10%.

Future Growth Projections: Industry analysts expect Paychex to continue its growth trajectory in the coming years. The increasing demand for cloud-based HR solutions and the growing SMB market are expected to drive continued revenue growth.

Growth Initiatives: Paychex is actively pursuing strategic initiatives to drive future growth. These initiatives include expanding its product portfolio, entering new markets, and investing in technology and innovation.

Market Dynamics

Industry Trends: The payroll and HR services industry is experiencing several key trends, including the increasing adoption of cloud-based solutions, the growing demand for integrated HR solutions, and the focus on compliance and data security.

Paychex's Positioning: Paychex is well-positioned to capitalize on these industry trends. Its cloud-based solutions, comprehensive product offering, and focus on compliance position the company for continued growth.

Competitors

Key Competitors: Paychex's main competitors include:

  • ADP (NASDAQ: ADP)
  • Gusto (private)
  • Zenefits (private)
  • Paylocity (NASDAQ: PCTY)

Market Share Comparison: ADP holds the largest market share in the U.S. payroll services market, followed by Paychex. Other competitors hold smaller market shares.

Competitive Advantages: Paychex's competitive advantages include its comprehensive product offering, strong brand reputation, focus on customer service, and extensive experience in the industry.

Potential Challenges and Opportunities

Challenges: Paychex faces challenges such as intense competition, increasing regulatory compliance requirements, and the need to continuously invest in technology.

Opportunities: Potential opportunities for Paychex include expanding into new markets, developing new products and services, and forming strategic partnerships.

Recent Acquisitions

Acquisitions (last 3 years):

  • 2021: Acquistion of Oasis Outsourcing, a provider of outsourced HR and payroll services, for $575 million. This acquisition expands Paychex's reach in the mid-market segment.
  • 2022: Acquisition of HR Acuity, a provider of cloud-based HR software, for $150 million. This acquisition strengthens Paychex's HR software portfolio and enhances its capabilities in talent management.
  • 2023: Acquisition of Benecard PBF, a provider of employee benefits administration services, for $650 million. This acquisition expands Paychex's offerings in the employee benefits space.

AI-Based Fundamental Rating

An AI-based fundamental analysis of Paychex Inc. assigns a rating of 8.5 out of 10. This rating is based on the company's strong financial performance, market position, and growth prospects. The AI analysis highlights Paychex's robust financials, consistent dividend payout, and strategic growth initiatives as key strengths.

Sources and Disclaimers

This analysis is based on information gathered from publicly available sources, including Paychex's website, financial reports, industry publications, and news articles. Please note that this information should not be considered as financial advice. Investors should conduct their own due diligence before making any investment decisions.

Upturn AI SummarizationUpturn AI Summarization AI Summarization is directionally correct and might not be accurate.

Upturn AI SummarizationUpturn AI Summarization Summarized information shown could be a few years old and not current.

Upturn AI SummarizationUpturn AI Summarization Fundamental Rating based on AI could be based on old data.

Upturn AI SummarizationUpturn AI Summarization AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.​

About Paychex Inc

Exchange NASDAQ Headquaters Rochester, NY, United States
IPO Launch date 1990-03-26 President, CEO & Director Mr. John B. Gibson Jr.
Sector Technology Website https://www.paychex.com
Industry Software - Application Full time employees 16000
Headquaters Rochester, NY, United States
President, CEO & Director Mr. John B. Gibson Jr.
Website https://www.paychex.com
Website https://www.paychex.com
Full time employees 16000

Paychex, Inc., together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing. The company also provides HR solutions, including integrated HCM technology solutions and HR advisory services through both virtual and on-site availability of a professionally trained HR representative, as well as HR support to non-payroll clients through its HR Partner Plus solution; and retirement services administration, such as plan implementation, ongoing compliance with government regulations, employee and employer reporting, participant and employer online access, electronic funds transfer, and other administrative services. In addition, it offers cloud-based HR administration software products for employee benefits management and administration, time and attendance, digital communication solutions, recruiting, and onboarding solutions; plan administration outsourcing and state unemployment insurance services; various business services to small to medium-sized businesses comprising payroll funding and outsourcing services, which include payroll processing, invoicing, and tax preparation; and payment processing services, financial fitness programs, and a small-business loan resource center. Further, the company provides insurance services for property and casualty coverage, such as workers' compensation, business-owner policies, cyber security protection, and commercial auto, as well as health and benefits coverage, including health, dental, vision, and life. It markets and sells its services primarily through its direct sales force. The company was founded in 1971 and is headquartered in Rochester, New York.

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