Paychex Valuation

Is PAYX * undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of PAYX * when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PAYX * (MX$2744) is trading above our estimate of fair value (MX$2191.73)

Significantly Below Fair Value: PAYX * is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PAYX *?

Key metric: As PAYX * is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for PAYX *. This is calculated by dividing PAYX *'s market cap by their current earnings.
What is PAYX *'s PE Ratio?
PE Ratio	30.1x
Earnings	US$1.70b
Market Cap	US$51.04b

PAYX * key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	9.5x
Enterprise Value/EBITDA	21.4x
PEG Ratio	4.7x

Price to Earnings Ratio vs Peers

How does PAYX *'s PE Ratio compare to its peers?

The above table shows the PE ratio for PAYX * vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	37.2x
6098 Recruit Holdings	39x	9.6%	JP¥14.2t
ADP Automatic Data Processing	32.2x	6.5%	US$121.7b
PAYC Paycom Software	27x	2.4%	US$12.3b
PCTY Paylocity Holding	50.7x	14.9%	US$10.9b
PAYX * Paychex	30.1x	6.3%	Mex$51.0b

Price-To-Earnings vs Peers: PAYX * is good value based on its Price-To-Earnings Ratio (30.1x) compared to the peer average (36.5x).

Price to Earnings Ratio vs Industry

How does PAYX *'s PE Ratio compare vs other companies in the Global Professional Services Industry?

19 Companies	Price / Earnings	Estimated Growth	Market Cap

19 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: PAYX * is expensive based on its Price-To-Earnings Ratio (30.1x) compared to the Global Professional Services industry average (20.5x).

Price to Earnings Ratio vs Fair Ratio

What is PAYX *'s PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PAYX * PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	30.1x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate PAYX *'s Price-To-Earnings Fair Ratio for valuation analysis.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.