Paycom Software Valuation

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

Valuation Score

5/6

Valuation Score 5/6

  • 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 PAYC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PAYC ($144.48) is trading below our estimate of fair value ($424.16)

Significantly Below Fair Value: PAYC is trading below fair value by more than 20%.


Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

PAYC 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/Revenue4.3x
Enterprise Value/EBITDA11.9x
PEG Ratio6.1x

Price to Earnings Ratio vs Peers

How does PAYC's PE Ratio compare to its peers?

The above table shows the PE ratio for PAYC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average57x
DAY Dayforce
155x37.3%US$7.7b
PCTY Paylocity Holding
39.4x16.4%US$7.5b
RHI Robert Half
18.3x11.2%US$6.3b
TNET TriNet Group
15.3x1.2%US$4.9b
PAYC Paycom Software
17.4x2.9%US$7.9b

Price-To-Earnings vs Peers: PAYC is good value based on its Price-To-Earnings Ratio (17.4x) compared to the peer average (57x).


Price to Earnings Ratio vs Industry

How does PAYC's PE Ratio compare vs other companies in the US Professional Services Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a18.3%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a18.3%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: PAYC is good value based on its Price-To-Earnings Ratio (17.4x) compared to the US Professional Services industry average (25.6x).


Price to Earnings Ratio vs Fair Ratio

What is PAYC'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.

PAYC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio17.4x
Fair PE Ratio24x

Price-To-Earnings vs Fair Ratio: PAYC is good value based on its Price-To-Earnings Ratio (17.4x) compared to the estimated Fair Price-To-Earnings Ratio (24x).


Analyst Price Targets

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

The above table shows the analyst PAYC forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$144.48
US$186.83
+29.3%
19.2%US$260.00US$145.00n/a16
Jul ’25US$142.30
US$188.70
+32.6%
18.7%US$260.00US$145.00n/a16
Jun ’25US$145.32
US$195.60
+34.6%
16.3%US$260.00US$150.00n/a15
May ’25US$186.24
US$204.00
+9.5%
13.5%US$260.00US$160.00n/a16
Apr ’25US$198.28
US$203.00
+2.4%
13.7%US$260.00US$160.00n/a16
Mar ’25US$184.75
US$202.88
+9.8%
13.8%US$260.00US$160.00n/a16
Feb ’25US$192.72
US$204.22
+6.0%
18.7%US$295.00US$140.00n/a16
Jan ’25US$206.72
US$220.29
+6.6%
29.0%US$400.00US$140.00n/a17
Dec ’24US$185.75
US$219.67
+18.3%
28.4%US$400.00US$140.00n/a18
Nov ’24US$150.69
US$247.54
+64.3%
33.2%US$400.00US$140.00n/a17
Oct ’24US$259.27
US$383.37
+47.9%
9.3%US$450.00US$300.00n/a19
Sep ’24US$295.79
US$387.71
+31.1%
7.6%US$450.00US$325.00n/a20
Aug ’24US$370.78
US$385.80
+4.1%
8.7%US$450.00US$330.00n/a20
Jul ’24US$321.24
US$370.05
+15.2%
10.8%US$450.00US$300.00US$142.3019
Jun ’24US$281.11
US$370.05
+31.6%
10.8%US$450.00US$300.00US$145.3219
May ’24US$297.55
US$383.06
+28.7%
10.7%US$450.00US$289.00US$186.2418
Apr ’24US$304.01
US$382.63
+25.9%
10.8%US$450.00US$289.00US$198.2818
Mar ’24US$284.51
US$386.17
+35.7%
8.9%US$450.00US$336.00US$184.7519
Feb ’24US$340.77
US$382.81
+12.3%
9.2%US$450.00US$324.00US$192.7219
Jan ’24US$310.31
US$392.70
+26.6%
8.2%US$450.00US$345.00US$206.7219
Dec ’23US$346.22
US$394.81
+14.0%
8.1%US$450.00US$345.00US$185.7519
Nov ’23US$342.71
US$393.05
+14.7%
8.1%US$450.00US$340.00US$150.6919
Oct ’23US$329.99
US$398.05
+20.6%
8.7%US$457.00US$339.00US$259.2719
Sep ’23US$346.57
US$398.05
+14.9%
8.7%US$457.00US$339.00US$295.7919
Aug ’23US$332.06
US$369.12
+11.2%
9.8%US$450.00US$308.00US$370.7818
Jul ’23US$291.17
US$374.39
+28.6%
9.8%US$450.00US$334.00US$321.2418

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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