Paychex, Inc. (PAYX) AI Stock Analysis

Paychex, Inc. specializes in offering integrated human capital management solutions tailored for small to medium-sized businesses across the United States, Europe, and India. The company's comprehensive suite of services encompasses payroll processing, payroll tax administration, and employee payment services, alongside regulatory compliance services like new-hire reporting and garnishment processing. Additionally, Paychex provides cloud-based HR administration software featuring employee benefits management, time and attendance tracking, digital communication solutions, recruiting, and onboarding. It also supports clients with plan administration outsourcing, state unemployment insurance services, and business services including payroll funding, invoicing, and tax preparation.

Paychex increased its annual revenue from $4.61B in FY2022 to $5.01B in FY2023, $5.28B in FY2024, $5.57B in FY2025, and $6.51B in FY2026, representing a 5-year revenue CAGR of 9.9%. Over the same timeframe, gross margin expanded from 70.6% in FY2022 to 74.3% in FY2026, while net margin moved from 30.2% to 27.0%. Net income climbed from $1.39B in FY2022 to $1.76B in FY2026, with diluted EPS rising from $3.76 to $5.51. For the latest quarter ended August 31, 2026, Paychex reported year-over-year quarterly revenue growth of 5.9% and quarterly earnings growth of 13.9%, contributing to trailing twelve-month revenue of $6.60B.

As of August 31, 2026, Paychex held $934.2M in cash and short-term investments against total debt of $4.62B, resulting in net debt of $3.69B. Total assets stood at $15.66B and shareholders' equity was $3.71B, with a current ratio of 1.28 and a debt-to-equity ratio of 1.25. During FY2026, operating cash flow reached $2.56B and free cash flow was $2.32B. The company allocated its capital toward $234.9M in capital expenditures, $611.0M in share buybacks, and $1.59B in dividends paid.

At a market cap of $39.74B and enterprise value of $40.88B, Paychex trades at a trailing P/E of 22.1x and a forward P/E of 17.5x. These multiples sit below the median of its Nasdaq-100 Technology peers, which shows a trailing P/E of 43.3x and a forward P/E of 25.7x. Paychex has an EV-to-EBITDA of 13.2x compared to 32.8x for the peer group median. Over the past year, the stock fell 7.9% compared to a 16.8% return for the S&P 500, and over five years its 9.4% return trailed the index's 83.0% gain.

Paychex pays a quarterly dividend with an annual dividend forward of $4.76, representing a dividend yield of 4.26%. The payout ratio is 82.6%, and the company has paid dividends for 39 consecutive years. Its 5-year annualized dividend growth rate is 11.2%, and its last ex-dividend date was October 26, 2026.

Wall Street analysts maintain 2 Strong Buy, 0 Buy, 15 Hold, 0 Sell, and 2 Strong Sell ratings on PAYX. The mean price target is $113.93, representing a 2.1% premium to the last close of $111.63. Paychex achieved 4 EPS beats over the last 4 quarters. For the current fiscal year ending May 31, 2027, consensus estimates project EPS of $5.96 on revenue of $6.86B, followed by next fiscal year estimates of $6.39 EPS and $7.24B revenue from 19 analysts.

This page is an AI-written research summary of Paychex, Inc. (PAYX). 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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