Paycom Software, Inc. (PAYC) AI Stock Analysis

Paycom Software, Inc. operates as a provider of cloud-based human capital management (HCM) solutions delivered via software-as-a-service (SaaS) for small to mid-sized businesses in the United States. Its platform covers the complete employment lifecycle, spanning recruitment, onboarding, talent acquisition, background checks, and tax credit services. Paycom integrates time and labor management tools such as scheduling, geofencing, and attendance tracking, alongside automated payroll processing and expense management. The company also offers talent management tools including employee self-service and compensation planning, the mobile-friendly "Manager on-the-Go" feature, and compliance tools for benefits administration, COBRA, and the Affordable Care Act.

Between FY2021 and FY2025, Paycom increased annual revenue from $1.06B to $2.05B, reflecting a 5-year revenue CAGR of 19.5% from FY2020 to FY2025. However, annual revenue expansion decelerated from 25.4% in FY2021 and 30.3% in FY2022 to 11.2% in FY2024 and 8.9% in FY2025. Gross margin contracted from 84.7% in FY2021 to 78.6% in FY2025, while operating margin moved from 24.0% in FY2021 to 27.6% in FY2025 after peaking at 33.7% in FY2024. Net income reached $453.4M in FY2025, down from $502.0M in FY2024. For the latest quarter ended June 30, 2026, revenue increased 9.8% year-over-year, while quarterly earnings grew 48.1%. Trailing twelve-month revenue stands at $2.14B with EPS of $9.45.

As of June 30, 2026, Paycom held $198.0M in cash and short-term investments against $982.8M in total debt, leaving net debt at $784.8M. Total assets stood at $5.20B and shareholders' equity was $571.5M, yielding a debt-to-equity ratio of 1.72 and a current ratio of 1.07. In FY2025, the company generated $678.9M in operating cash flow and funded $270.9M in capital expenditures, delivering $408.0M in free cash flow. Capital allocation in FY2025 included $325.5M for share buybacks and $84.8M in dividends paid, contributing to a 5-year share count reduction of 21.2%.

At a last close of $251.64, Paycom holds a market capitalization of $11.34B and an enterprise value of $10.78B. The stock trades at a trailing P/E of 26.6x and a forward P/E of 16.7x, compared to medians of 28.1x and 18.8x for its US-listed Technology peers. Paycom's EV/EBITDA stands at 12.0x versus the peer median of 16.6x, while its price-to-sales ratio of 5.3x sits above the peer median of 2.8x. Over the past year, PAYC returned 26.7%, outperforming the S&P 500 (SPY) return of 16.8%, though its 5-year return of -50.1% trails the S&P 500's 83.0% gain.

Paycom pays a forward annual dividend of $1.50 per share, representing a dividend yield of 0.60% and a payout ratio of 16.1%. The company distributes dividends on a quarterly frequency and has paid dividends for 4 consecutive years, with its most recent ex-dividend date on August 24, 2026.

Wall Street coverage includes 6 Strong Buy, 13 Hold, and 2 Sell ratings. The consensus mean price target is $222.59, representing an 11.5% discount to the last close of $251.64. For the fiscal year ending December 31, 2026, analysts estimate revenue of $2.21B and EPS of $12.10, indicating 30.9% EPS growth. For the following fiscal year, 21 analysts project revenue of $2.37B and EPS of $13.96. Paycom has topped EPS expectations in 2 of the last 4 quarters, with its next earnings report scheduled for November 4, 2026.

This page is an AI-written research summary of Paycom Software, Inc. (PAYC). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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