Paychex, Inc. (NASDAQ:PAYX) Annual Results: Here's What Analysts Are Forecasting For This Year

Paychex, Inc. (NASDAQ:PAYX) shareholders are probably feeling a little disappointed, since its shares fell 5.8% to US$118 in the week after its latest annual results. Paychex reported in line with analyst predictions, delivering revenues of US$5.3b and statutory earnings per share of US$4.67, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Paychex after the latest results.

Check out our latest analysis for Paychex

Following the latest results, Paychex's 15 analysts are now forecasting revenues of US$5.52b in 2025. This would be a reasonable 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 6.0% to US$4.98. In the lead-up to this report, the analysts had been modelling revenues of US$5.54b and earnings per share (EPS) of US$4.97 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$121, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Paychex analyst has a price target of US$130 per share, while the most pessimistic values it at US$110. This is a very narrow spread of estimates, implying either that Paychex is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Paychex's revenue growth is expected to slow, with the forecast 4.6% annualised growth rate until the end of 2025 being well below the historical 7.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Paychex is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Paychex. Long-term earnings power is much more important than next year's profits. We have forecasts for Paychex going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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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