Paychex (PAYX) to Report Q2 Earnings: Here's What to Expect
Paychex, Inc. PAYX is scheduled to release its second-quarter fiscal 2024 results on Dec 21, before market open.
The company has a decent earnings surprise history, with earnings surpassing the Zacks Consensus Estimate in three of the four trailing quarters and missing on one instance, with the average earnings surprise being 2.3%.
Expectations From PAYX in Q2
The Zacks Consensus Estimate for the top line is currently pegged at $1.27 billion, up 6.5% from the year-ago actual figure. We expect to see continued demand for advisory assistance and HR outsourcing solutions.
Paychex, Inc. Price and EPS Surprise
Paychex, Inc. price-eps-surprise | Paychex, Inc. Quote
Revenues from Management Solutions are expected to rise 4.7% on a year-over-year basis, our estimate for which is currently pegged at $937.7 million. Such an increase can be correlated with an increased number of clients and client employees, product penetration, price realization and persisting demand for Human Capital Management ancillary services.
Our estimate for PEO and insurance solution revenues is currently pegged at $290.6 million, which indicates a 6.3% increase from the year-ago reported figure. This is due to the increase in the average number of worksite employees and an expected rise in revenues per client.
We expect interest on funds held for clients to increase 51.3% year over year to $32.8 million. The company is anticipated to enjoy higher average interest rates.
The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is $1.07 per share, which indicates 8.1% growth from the year-ago figure. The continuing trend of demand situation and revenue growth is expected to have driven the growth.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for PAYX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
PAYX has an Earnings ESP of +0.72% and a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sneak Peek Into Recent Results of Key Sector Players
Here are a few stocks from the broader Business Services sector that have performed well in their recent earnings releases:
ABM Industries Inc. ABM reported impressive fourth-quarter fiscal 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
Adjusted earnings (considering 5 cents from non-recurring items) were $1.01 per share, which beat the consensus estimate by 8.6% and increased 13.5% from the last fiscal year’s quarterly figure.
Total revenues of $2.09 billion beat the consensus mark by 2.8% and improved 4.1% from the last fiscal year’s quarterly figure. The upside was backed by solid segmental performance, strength from new accounts that came online late last year and the acquisition of RavenVolt. Quarterly revenue growth included 3.8% organic growth and a 0.3% upside from acquisitions.
S&P Global Inc. SPGI reported impressive third-quarter results, wherein earnings and revenues beat the Zacks Consensus Estimate.
SPGI’s adjusted earnings per share (excluding 88 cents from non-recurring items) of $3.21 rose 9.6% year over year and beat the consensus estimate by 5.3%. Revenues of $3.08 billion surpassed the consensus estimate by 2% and improved 8% year over year, backed by strong performance in all divisions.
Verisk Analytics Inc. VRSK reported impressive third-quarter 2023 results, wherein earnings and revenues beat the respective estimates.
VRSK’s adjusted earnings (excluding 23 cents from non-recurring items) were $1.52 per share, beating the Zacks Consensus Estimate and increasing 4.1% from the year-ago reported figure. Such a beat was supported by strong growth in Underwriting Data Solutions, Life Insurance and Extreme Events Solutions.
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Paychex, Inc. (PAYX) : Free Stock Analysis Report
ABM Industries Incorporated (ABM) : Free Stock Analysis Report
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report
S&P Global Inc. (SPGI) : Free Stock Analysis Report
