NasdaqGS:PAYX

Stock Analysis Report

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Executive Summary

Paychex, Inc. provides integrated human capital management solutions for human resources (HR), payroll, benefits, and insurance services for small- to medium-sized businesses in the United States and Europe. More Details


Snowflake Analysis

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Paychex's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PAYX has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.8%

PAYX

-1.4%

US IT

-1.4%

US Market


1 Year Return

-0.9%

PAYX

30.5%

US IT

17.8%

US Market

Return vs Industry: PAYX underperformed the US IT industry which returned 30.5% over the past year.

Return vs Market: PAYX underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

PAYXIndustryMarket
7 Day0.8%-1.4%-1.4%
30 Day8.2%3.8%4.7%
90 Day16.3%7.1%8.2%
1 Year2.5%-0.9%31.8%30.5%20.5%17.8%
3 Year43.2%30.0%91.9%84.5%42.2%32.7%
5 Year89.1%62.2%151.8%131.7%83.4%62.7%

Price Volatility Vs. Market

How volatile is Paychex's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Paychex undervalued compared to its fair value and its price relative to the market?

28.8x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: PAYX ($83.98) is trading above our estimate of fair value ($54.42)

Significantly Below Fair Value: PAYX is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: PAYX is good value based on its PE Ratio (28.8x) compared to the US IT industry average (32.6x).

PE vs Market: PAYX is poor value based on its PE Ratio (28.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: PAYX is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: PAYX is overvalued based on its PB Ratio (10.9x) compared to the US IT industry average (3.7x).


Next Steps

Future Growth

How is Paychex forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

7.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PAYX's forecast earnings growth (7.8% per year) is above the savings rate (2.2%).

Earnings vs Market: PAYX's earnings (7.8% per year) are forecast to grow slower than the US market (22% per year).

High Growth Earnings: PAYX's earnings are forecast to grow, but not significantly.

Revenue vs Market: PAYX's revenue (5.3% per year) is forecast to grow slower than the US market (10% per year).

High Growth Revenue: PAYX's revenue (5.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PAYX's Return on Equity is forecast to be very high in 3 years time (40.4%).


Next Steps

Past Performance

How has Paychex performed over the past 5 years?

9.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PAYX has high quality earnings.

Growing Profit Margin: PAYX's current net profit margins (26.3%) are lower than last year (27%).


Past Earnings Growth Analysis

Earnings Trend: PAYX's earnings have grown by 9.7% per year over the past 5 years.

Accelerating Growth: PAYX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PAYX had negative earnings growth (-0.9%) over the past year, making it difficult to compare to the IT industry average (8.1%).


Return on Equity

High ROE: PAYX's Return on Equity (37.6%) is considered high.


Next Steps

Financial Health

How is Paychex's financial position?


Financial Position Analysis

Short Term Liabilities: PAYX's short term assets ($5.3B) exceed its short term liabilities ($4.3B).

Long Term Liabilities: PAYX's short term assets ($5.3B) exceed its long term liabilities ($1.3B).


Debt to Equity History and Analysis

Debt Level: PAYX's debt to equity ratio (27.6%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if PAYX's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: PAYX's debt is well covered by operating cash flow (177.7%).

Interest Coverage: PAYX's interest payments on its debt are well covered by EBIT (48x coverage).


Balance Sheet


Next Steps

Dividend

What is Paychex current dividend yield, its reliability and sustainability?

2.95%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: PAYX's dividend (2.95%) is higher than the bottom 25% of dividend payers in the US market (1.65%).

High Dividend: PAYX's dividend (2.95%) is low compared to the top 25% of dividend payers in the US market (4.67%).


Stability and Growth of Payments

Stable Dividend: PAYX's dividends per share have been stable in the past 10 years.

Growing Dividend: PAYX's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (85.1%), PAYX's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PAYX's dividends in 3 years are forecast to be covered by earnings (80.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.1yrs

Average management tenure


CEO

Marty Mucci (60 yo)

10.08yrs

Tenure

US$8,068,717

Compensation

Mr. Martin Mucci, also known as Marty, has been the Chief Executive Officer and President of Paychex, Inc. since September 30, 2010 and has been its Director since 2010. Mr. Mucci joined Paychex Inc. in Ma ...


CEO Compensation Analysis

Compensation vs Market: Marty's total compensation ($USD8.07M) is about average for companies of similar size in the US market ($USD11.20M).

Compensation vs Earnings: Marty's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Martin Mucci
President10.08yrsUS$8.07m0.10%
$ 30.2m
Efrain Rivera
Senior VP9.33yrsUS$2.22m0.022%
$ 6.6m
Mark Bottini
Senior Vice President of Sales9yrsUS$1.85m0.024%
$ 7.2m
Michael Gioja
Senior VP of Product Development & Information Technology9.25yrsUS$1.87m0.018%
$ 5.4m
John Gibson
Senior Vice President of Service7.42yrsUS$1.87m0.013%
$ 3.8m
Christopher DeSalvo
VP of Service Excellence & Operations1.58yrsno datano data
Terri Allen
Investor Relationsno datano datano data
Stephanie Schaeffer
VP, Chief Legal Officer & Corporate Secretary14.75yrsno data0.018%
$ 5.4m
Frank Fiorille
VP of Risk3.75yrsno datano data
Laura Lynch
Director of Corporate Communications19.75yrsno datano data
Neal Collins
Vice President of Corporate Development2.5yrsno datano data
Maureen Lally
Vice President of Marketingno datano datano data

9.1yrs

Average Tenure

59.5yo

Average Age

Experienced Management: PAYX's management team is seasoned and experienced (9.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Martin Mucci
President10.08yrsUS$8.07m0.10%
$ 30.2m
Joseph Tucci
Lead Independent Directorno dataUS$291.01k0.014%
$ 4.4m
Joseph Doody
Independent Director10yrsUS$276.01k0.0058%
$ 1.7m
Pamela Joseph
Independent Director2.5yrsUS$275.26k0.0022%
$ 655.1k
B. Golisano
Founder & Chairman16yrsUS$335.00k10.45%
$ 3.2b
David Flaschen
Independent Director21.75yrsUS$312.76k0.013%
$ 3.9m
Joseph Velli
Independent Director13.75yrsUS$287.01k0.011%
$ 3.5m
Thomas Bonadio
Independent Director3.75yrsUS$276.01k0.0045%
$ 1.4m
Kara Wilson
Independent Director3.25yrsUS$276.01k0.0012%
$ 362.3k

10.4yrs

Average Tenure

64yo

Average Age

Experienced Board: PAYX's board of directors are seasoned and experienced ( 10.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PAYX insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Paychex, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Paychex, Inc.
  • Ticker: PAYX
  • Exchange: NasdaqGS
  • Founded: 1979
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: US$30.189b
  • Shares outstanding: 359.50m
  • Website: https://www.paychex.com

Number of Employees


Location

  • Paychex, Inc.
  • 911 Panorama Trail South
  • Rochester
  • New York
  • 14625-2396
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PAYXNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 1983
PCXXTRA (XETRA Trading Platform)YesCommon StockDEEURAug 1983
PCXDB (Deutsche Boerse AG)YesCommon StockDEEURAug 1983
0KGELSE (London Stock Exchange)YesCommon StockGBUSDAug 1983
PAYXWBAG (Wiener Boerse AG)YesCommon StockATEURAug 1983
P1AY34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

Paychex, Inc. provides integrated human capital management solutions for human resources (HR), payroll, benefits, and insurance services for small- to medium-sized businesses in the United States and Europ ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/22 23:57
End of Day Share Price2020/10/22 00:00
Earnings2020/08/31
Annual Earnings2020/05/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.