Paycom Software, Inc.

Valuation Analysis

About the Company

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. The company offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution offers payroll applications comprising better employee transaction interface, payroll and payroll tax management, payroll card, Everyday, Paycom pay, Client Action Center, expense management, garnishment administration, and GL concierge applications; talent acquisition, including applicant tracking, background checks, on-boarding, e-verify, and tax credit services; and talent management applications that include employee self-service, compensation budgeti

Paycom Software, Inc. Stock at a Glance

Paycom Software, Inc. (PAYC) is currently trading at $134.52 with a market capitalization of $6.3B. The trailing P/E ratio stands at 15.57x, with a forward P/E of 10.94x. The 52-week range spans from $104.90 to $248.95; the current price is 46% below the yearly high. Year-over-year revenue growth stands at +7.8%. The net profit margin stands at 22.44%.

💰 Dividend

Paycom Software, Inc. pays an annual dividend of $1.50 per share, representing a yield of 1.12%. The payout ratio stands at 17.36%.

📊 Analyst Rating

16 analysts rate Paycom Software, Inc. (PAYC) on consensus: None. The average price target is $151.44, implying +12.58% from the current price. Analyst price targets range from $120.00 to $195.00.

Paycom Software, Inc.: The Investment Case in Detail

Paycom Software, Inc. (PAYC) operates in the Technology — specifically Software - Application — and is headquartered in United States. Below is a structured read of the investment case built directly from the latest fundamentals, valuation multiples, analyst positioning and smart-money flows. Each section translates raw numbers into the investment logic they imply, so you can decide whether the risk/reward fits your portfolio.

The Bull Case

With a gross margin near 87.6%, the company sits in the top tier of its industry — these are the kinds of structural margins that protect earnings during downturns. Return on equity of 37.15% places management among the most capital-efficient operators in the public market — every euro of shareholder capital is working hard. Free cash flow is positive and net margins stand at 22.44%, meaning reported earnings translate into real cash that can fund buybacks, dividends or strategic acquisitions.

Valuation in Context

With a PEG ratio of 0.97, the price-to-earnings multiple is actually below the company's growth rate — classic value-meets-growth territory that Peter Lynch would have called a 'GARP' opportunity.

What to Watch Next

• The forward P/E of 10.94x is meaningfully below the trailing 15.57x — analysts expect earnings to step up; the next earnings release is the test.
• The price sits in the lower quartile of the 52-week range — value hunters often start scaling in around this zone if fundamentals hold.

Investment Thesis: Strengths & Weaknesses

Technical Snapshot

The price is in a transition zone relative to the moving averages — no clear signal.

Risk Profile

The data points to relatively defensive market behavior, elevated short interest (9.85%).

Trading Data

💵 Dividend Info

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