Paycom (PAYC) to Report Q3 Earnings: What's in the Offing?
Paycom Software PAYC is scheduled to report third-quarter 2023 results on Oct 31.
The company projects revenues between $410 million and $412 million for the third quarter. The Zacks Consensus Estimate for revenues is pegged at $411 million, indicating an increase of 23% year over year. The consensus mark for earnings is pegged at $1.62 per share, suggesting a 27.6% rise from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $156-$158 million in the quarter to be reported.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8%.
Let’s see how things have shaped up for the upcoming announcement.
Paycom Software, Inc. Price and EPS Surprise
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
Factors to Note
Paycom’s third-quarter performance is likely to have benefited from the strong demand for the latest products, new business wins and the high-margin recurring revenue business. Our estimates for the company’s Recurring revenues are pegged at $404 million, suggesting year-over-year growth of 23.1%.
Paycom’s employee usage strategy, sales efforts and investments might have contributed to sales growth in the quarter to be reported. Moreover, the cloud-based human capital management solution provider earlier announced its intention to aggressively drive advertising and marketing efforts to generate more demo leads, virtual meetings and increased close rates of deals. These are likely to have led to market share gains for Paycom.
The company expects the strong adoption of the BETI solution, the industry-first technology that empowers employees to do their payroll among clients, aiding them to avoid time-consuming manual checks. We anticipate new client additions to have driven the top line in the third quarter.
However, Paycom’s quarterly performance is expected to have been affected by macroeconomic uncertainty-triggered economic and business disruptions, which might have hurt the headcount across its client base. Enterprises are postponing their large IT spending plans due to the weakening global economy amid ongoing macroeconomic and geopolitical issues.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Paycom this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Paycom carries a Zacks Rank #4 (Sell) at present and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Palantir Technologies PLTR, ON Semiconductor ON and Synaptics SYNA have the right combination of elements to post an earnings beat in their upcoming releases.
Palantir carries a Zacks Rank #2 and has an Earnings ESP of +4.35%. The company is scheduled to report third-quarter 2023 results on Nov 2. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, with the average surprise being 2.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Palantir’s third-quarter earnings stands at 6 cents per share, indicating a year-over-year improvement of 500%. It is estimated to report revenues of $555 million, which suggests an increase of approximately 16.1% from the year-ago quarter.
ON carries a Zacks Rank #2 and has an Earnings ESP of +1.00%. The company is scheduled to report third-quarter 2022 results on Oct 30. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.7%.
The Zacks Consensus Estimate for ON’s third-quarter earnings is pegged at $1.35 per share, indicating a year-over-year decrease of 6.9%. The consensus mark for revenues stands at $2.15 billion, suggesting a year-over-year decline of 2.1%.
Synaptics is slated to report first-quarter fiscal 2024 results on Nov 9. The company has a Zacks Rank #2 and an Earnings ESP of +3.54% at present. Synaptics’ earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 3.6%.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 38 cents per share, suggesting a decrease of 89.2% from the year-ago quarter’s earnings of $3.52. Synaptics’ quarterly revenues are estimated to decline 48.2% year over year to $232 million.
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Synaptics Incorporated (SYNA) : Free Stock Analysis Report
Paycom Software, Inc. (PAYC) : Free Stock Analysis Report
ON Semiconductor Corporation (ON) : Free Stock Analysis Report
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
