NYSE:PAYC

Stock Analysis Report

Executive Summary

Paycom Software, Inc. provides cloud-based human capital management (HCM) software service for small to mid-sized companies in the United States.


Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: PAYC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-4.1%

PAYC

2.6%

US Software

5.3%

US Market


1 Year Return

6.1%

PAYC

9.5%

US Software

-10.7%

US Market

Return vs Industry: PAYC underperformed the US Software industry which returned 9.5% over the past year.

Return vs Market: PAYC exceeded the US Market which returned -10.7% over the past year.


Shareholder returns

PAYCIndustryMarket
7 Day-4.1%2.6%5.3%
30 Day-30.8%-7.9%-13.6%
90 Day-25.7%-3.2%-19.8%
1 Year6.1%6.1%10.6%9.5%-8.9%-10.7%
3 Year252.9%252.9%106.4%97.6%15.5%8.0%
5 Year525.8%525.8%173.9%154.7%35.2%20.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

64.42x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: PAYC ($202.01) is trading above our estimate of fair value ($102.48)

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


Price To Earnings Ratio

PE vs Industry: PAYC is poor value based on its PE Ratio (64.4x) compared to the Software industry average (40x).

PE vs Market: PAYC is poor value based on its PE Ratio (64.4x) compared to the US market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: PAYC is poor value based on its PEG Ratio (4.1x)


Price to Book Ratio

PB vs Industry: PAYC is overvalued based on its PB Ratio (22.1x) compared to the US Software industry average (4.3x).


Next Steps

Future Growth

How is Paycom Software forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

15.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PAYC's forecast earnings growth (15.6% per year) is above the savings rate (1.7%).

Earnings vs Market: PAYC's earnings (15.6% per year) are forecast to grow faster than the US market (12.3% per year).

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

Revenue vs Market: PAYC's revenue (19.8% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: PAYC's revenue (19.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PAYC's Return on Equity is forecast to be high in 3 years time (36%)


Next Steps

Past Performance

How has Paycom Software performed over the past 5 years?

44.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PAYC has high quality earnings.

Growing Profit Margin: PAYC's current net profit margins (24.5%) are higher than last year (24.2%).


Past Earnings Growth Analysis

Earnings Trend: PAYC's earnings have grown significantly by 44.1% per year over the past 5 years.

Accelerating Growth: PAYC's earnings growth over the past year (31.8%) is below its 5-year average (44.1% per year).

Earnings vs Industry: PAYC earnings growth over the past year (31.8%) exceeded the Software industry 18.7%.


Return on Equity

High ROE: PAYC's Return on Equity (34.3%) is considered high.


Next Steps

Financial Health

How is Paycom Software's financial position?


Financial Position Analysis

Short Term Liabilities: PAYC's short term assets ($1.9B) exceed its short term liabilities ($1.8B).

Long Term Liabilities: PAYC's short term assets ($1.9B) exceed its long term liabilities ($206.8M).


Debt to Equity History and Analysis

Debt Level: PAYC's debt to equity ratio (6.2%) is considered satisfactory.

Reducing Debt: PAYC's debt to equity ratio has reduced from 36.3% to 6.2% over the past 5 years.

Debt Coverage: PAYC's debt is well covered by operating cash flow (687.2%).

Interest Coverage: PAYC's interest payments on its debt are well covered by EBIT (97.7x coverage).


Balance Sheet

Inventory Level: PAYC has a low level of unsold assets or inventory.

Debt Coverage by Assets: PAYC's debt is covered by short term assets (assets are 57.3x debt).


Next Steps

Dividend

What is Paycom Software's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate PAYC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate PAYC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PAYC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PAYC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PAYC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

7.0yrs

Average management tenure


CEO

Chad Richison (49yo)

22.25s

Tenure

US$21,138,558

Compensation

Mr. Chad Richison has served as President, Chief Executive Officer and Founder of Paycom Software, Inc. (“Paycom”) since 1998. He has also served as a Member of Board of Directors at Paycom Software, Inc.  ...


CEO Compensation Analysis

Compensation vs Market: Chad's total compensation ($USD21.14M) is above average for companies of similar size in the US market ($USD11.77M).

Compensation vs Earnings: Chad's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Chad Richison
Founder22.25yrsUS$21.14m7.39% $861.0m
Craig Boelte
CFO, Treasurer & Corporate Secretary14.17yrsUS$6.46m0.70% $81.6m
Jon Evans
Chief Operating Officer3.08yrsUS$2.02m0.070% $8.1m
Bradley Smith
Chief Information Officer2yrsUS$2.04m0.10% $11.7m
Jeffrey York
Chief Sales Officer13.25yrsUS$6.64m1.21% $140.8m
James Samford
Head of Investor Relations1.25yrsno datano data
Tiffany McGowen
Director of Recruitingno datano datano data
Kristy Ross
Head of the San Francisco Office7yrsno datano data

7.0yrs

Average Tenure

52yo

Average Age

Experienced Management: PAYC's management team is seasoned and experienced (7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Chad Richison
Founder22.25yrsUS$21.14m7.39% $861.0m
Henry Duques
Independent Director3.42yrsUS$311.47k0.0082% $957.2k
Janet Haugen
Independent Director2.17yrsUS$312.35k0.0048% $561.3k
Robert Levenson
Independent Director12.75yrsUS$312.47k0.14% $16.7m
Frederick Peters
Former Miscellaneous Officerno dataUS$335.10k0.044% $5.1m
J.C. Watts
Independent Director3.42yrsUS$307.97k0.0082% $957.2k
Jason Clark
Independent Director5.67yrsUS$312.47k0.010% $1.2m

3.5yrs

Average Tenure

61yo

Average Age

Experienced Board: PAYC's board of directors are considered experienced (3.5 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold 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

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


Key Information

  • Name: Paycom Software, Inc.
  • Ticker: PAYC
  • Exchange: NYSE
  • Founded: 1998
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$11.645b
  • Shares outstanding: 57.65m
  • Website: https://www.paycom.com

Number of Employees


Location

  • Paycom Software, Inc.
  • 7501 West Memorial Road
  • Oklahoma City
  • Oklahoma
  • 73142
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PAYCNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2014
0PYDB (Deutsche Boerse AG)YesCommon StockDEEURApr 2014
0KGHLSE (London Stock Exchange)YesCommon StockGBUSDApr 2014
0PYBRSE (Berne Stock Exchange)YesCommon StockCHCHFApr 2014
PAYC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 2014

Biography

Paycom Software, Inc. provides cloud-based human capital management (HCM) software service for small to mid-sized companies in the United States. It provides functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company’s HCM solution offers a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, labor management reports/push reporting, and geofencing/geotracking. Its HCM solution also provides payroll applications comprising payroll and tax management, Paycom pay, expense management, mileage tracker/fixed and variable rates, garnishment management, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, and Paycom learning and course content, as well as my analytics, which offer employment predictor reporting. In addition, the company’s HCM solution offers HR management applications comprising manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration/benefits to carrier; COBRA administration; personnel action forms; surveys; and affordable care act applications. Paycom Software, Inc. was founded in 1998 and is headquartered in Oklahoma City, Oklahoma. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 05:42
End of Day Share Price2020/03/31 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.