A Fresh Look at Paychex (PAYX) Valuation After Q1 Earnings Beat and Raised 2026 Guidance

Paychex (PAYX) is generating fresh attention after releasing first-quarter results that show revenue rising 17% and adjusted earnings per share exceeding expectations. Management responded by boosting full-year revenue and adjusted EPS growth guidance, even as acquisition expenses weighed on GAAP profit.

See our latest analysis for Paychex.

Despite a string of upbeat quarterly results and active buyback efforts, Paychex’s share price has lagged, sitting near recent lows at $124.61. With a 1-year total shareholder return of -0.07% and solid gains over the longer term, the stock’s momentum has clearly cooled as investors weigh higher costs against the potential for future growth from acquisitions and partnerships.

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The question now is whether Paychex’s recent selloff creates a compelling entry point for value-focused investors, or if the market has already accounted for its future growth prospects in the current share price.

Most Popular Narrative: 14.1% Undervalued

With Paychex’s fair value pegged at $145.08, the narrative signals notable upside compared to the last close at $124.61. The focus turns to what is driving this potential as bulls and skeptics face off over future growth assumptions.

The pending acquisition of Paycor is expected to strengthen Paychex's competitive position by expanding its customer base and offering a more comprehensive HCM portfolio, which could drive revenue growth through cross-selling opportunities.

Read the complete narrative.

Want to know the engineering behind this premium forecast? The narrative banks on ambitious growth drivers, locked-in margin expansion, and a future multiple that challenges sector norms. Curious to see which bold financial projections unlock that valuation? Click through for the numbers that could change the game.

Result: Fair Value of $145.08 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, integration challenges from the Paycor acquisition and rising employee costs could pressure margins. This may potentially derail Paychex's bullish outlook.

Find out about the key risks to this Paychex narrative.

Build Your Own Paychex Narrative

If you have a different perspective or want to dig into the figures yourself, you can quickly assemble your own Paychex story in just a few minutes. Do it your way

A great starting point for your Paychex research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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