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Paycom Software (PAYC) Gains As Market Dips: What You Should Know

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  • PAYC

Paycom Software (PAYC) closed at $535.82 in the latest trading session, marking a +0.35% move from the prior day. This change outpaced the S&P 500's 0.11% loss on the day.

Prior to today's trading, shares of the maker of human-resources and payroll software had gained 4.43% over the past month. This has outpaced the Computer and Technology sector's gain of 1.9% and lagged the S&P 500's gain of 4.61% in that time.

Investors will be hoping for strength from PAYC as it approaches its next earnings release, which is expected to be November 2, 2021. The company is expected to report EPS of $0.91, up 30% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $250.37 million, up 27.39% from the prior-year quarter.

PAYC's full-year Zacks Consensus Estimates are calling for earnings of $4.39 per share and revenue of $1.04 billion. These results would represent year-over-year changes of +25.79% and +23.31%, respectively.

Investors might also notice recent changes to analyst estimates for PAYC. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.45% lower. PAYC is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, PAYC is holding a Forward P/E ratio of 121.54. Its industry sports an average Forward P/E of 70.23, so we one might conclude that PAYC is trading at a premium comparatively.

Investors should also note that PAYC has a PEG ratio of 4.86 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software was holding an average PEG ratio of 4.8 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 183, putting it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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