Paycom Software, Inc.

NYSE:PAYC Stock Report

Market Cap: US$12.1b

Paycom Software Valuation

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

Valuation Score

2/6

Valuation Score 2/6

  • 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 ($219.78) is trading below our estimate of fair value ($243.5)

Significantly Below Fair Value: PAYC is trading below fair value, but not by a significant amount.

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for PAYC. This is calculated by dividing PAYC's market cap by their current earnings.
What is PAYC's PE Ratio?
PE Ratio26.1x
EarningsUS$470.19m
Market CapUS$12.12b

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 Average28.6x
PCTY Paylocity Holding
49.1x14.9%US$10.9b
RHI Robert Half
25.9x17.3%US$7.2b
TNET TriNet Group
17.8x2.8%US$4.4b
KFY Korn Ferry
21.6x24.7%US$3.9b
PAYC Paycom Software
26.1x2.4%US$12.1b

Price-To-Earnings vs Peers: PAYC is good value based on its Price-To-Earnings Ratio (26.1x) compared to the peer average (28.6x).

Price to Earnings Ratio vs Industry

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

10 CompaniesPrice / EarningsEstimated GrowthMarket Cap
CNDT Conduent
1.3x-104.3%US$569.21m
CIH China Index Holdings
3.5xn/aUS$87.15m
ALJJ ALJ Regional Holdings
0.7xn/aUS$70.26m
STCN Steel Connect
3.2xn/aUS$62.29m
PAYC 26.1xIndustry Avg. 23.8xNo. of Companies16PE01632486480+
10 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: PAYC is expensive based on its Price-To-Earnings Ratio (26.1x) compared to the US Professional Services industry average (23.8x).

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 Ratio26.1x
Fair PE Ratio25.7x

Price-To-Earnings vs Fair Ratio: PAYC is expensive based on its Price-To-Earnings Ratio (26.1x) compared to the estimated Fair Price-To-Earnings Ratio (25.7x).

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$219.78
US$201.62
-8.3%
11.0%US$260.00US$175.00n/a15
Nov ’25US$210.65
US$198.03
-6.0%
10.4%US$250.00US$175.00n/a15
Oct ’25US$166.31
US$183.50
+10.3%
14.6%US$250.00US$150.00n/a15
Sep ’25US$162.78
US$185.58
+14.0%
14.9%US$250.00US$150.00n/a16
Aug ’25US$167.38
US$185.58
+10.9%
14.9%US$250.00US$150.00n/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$140.00US$210.6517
Oct ’24US$259.27
US$383.37
+47.9%
9.3%US$450.00US$300.00US$166.3119
Sep ’24US$295.79
US$387.71
+31.1%
7.6%US$450.00US$325.00US$162.7820
Aug ’24US$370.78
US$385.80
+4.1%
8.7%US$450.00US$330.00US$167.3820
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

Analyst Forecast: Target price is lower than the current share price.

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