Paycom Software (PAYC) Valuation Check After Recent Share Price Weakness

Paycom Software: Recent Returns and Business Snapshot

Paycom Software (PAYC) has been under pressure recently, with the stock showing negative returns over the past week, month and past 3 months. This performance has prompted some investors to reassess its current valuation.

See our latest analysis for Paycom Software.

At a share price of US$148.41, Paycom’s recent 11% 30 day share price decline and 26% 90 day share price decline sit alongside a 1 year total shareholder return decline of 29%. This suggests momentum has been fading rather than building.

If Paycom’s weaker recent returns have you reassessing your options, this could be a handy moment to look across high growth tech and AI stocks for other tech names catching investors’ attention.

So with Paycom trading at US$148.41, sitting on a 64% estimated intrinsic discount and a sizeable gap to analyst price targets, is this a genuine opportunity or a market that is already adjusting for future growth?

Most Popular Narrative: 27.9% Undervalued

Compared to Paycom Software’s last close at US$148.41, the most followed narrative points to a fair value of US$205.71, implying a sizeable gap based on its long term cash generation and profitability assumptions.

Automation and AI-driven product innovation, combined with Paycom's unified single database architecture, are driving salesforce productivity gains, increased client satisfaction, and higher client retention rates. These factors are expected to strengthen long-term net margins and future earnings stability. Paycom's ability to activate the majority of its client base on new AI-powered features with minimal training or friction leverages the industry shift toward automation and digital transformation in workforce management. This supports sustained new logo wins and topline revenue growth.

Read the complete narrative.

Curious what revenue growth, margin lift and earnings multiple this narrative leans on to reach that value? The core assumptions may surprise you.

Result: Fair Value of $205.71 (UNDERVALUED)

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

However, this hinges on AI tools like IWant retaining an edge, and on ongoing spending for AI and infrastructure not weighing more heavily on margins than expected.

Find out about the key risks to this Paycom Software narrative.

Build Your Own Paycom Software Narrative

If you see the numbers differently or prefer to test your own assumptions, you can build and refine a fresh thesis in just a few minutes with Do it your way.

A great starting point for your Paycom Software research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Ready to hunt for more investment ideas?

If Paycom is only one piece of your watchlist, do not stop here. Use the screener to spot fresh ideas before other investors catch on.

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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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