Paycom Software (PAYC) Stock Sinks As Market Gains: Here's Why
Paycom Software (PAYC) closed at $197.57 in the latest trading session, marking a -1.36% move from the prior day. This change lagged the S&P 500's 0.08% gain on the day. Meanwhile, the Dow experienced a drop of 0.31%, and the technology-dominated Nasdaq saw an increase of 0.02%.
Coming into today, shares of the maker of human-resources and payroll software had lost 1.68% in the past month. In that same time, the Computer and Technology sector gained 2.68%, while the S&P 500 gained 3.52%.
The upcoming earnings release of Paycom Software will be of great interest to investors. In that report, analysts expect Paycom Software to post earnings of $1.78 per share. This would mark year-over-year growth of 2.89%. Alongside, our most recent consensus estimate is anticipating revenue of $422.54 million, indicating a 14.01% upward movement from the same quarter last year.
It is also important to note the recent changes to analyst estimates for Paycom Software. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.04% upward. As of now, Paycom Software holds a Zacks Rank of #4 (Sell).
Looking at its valuation, Paycom Software is holding a Forward P/E ratio of 24.67. For comparison, its industry has an average Forward P/E of 35.54, which means Paycom Software is trading at a discount to the group.
One should further note that PAYC currently holds a PEG ratio of 1.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 1.71 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 33, this industry ranks in the top 14% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Paycom Software, Inc. (PAYC) : Free Stock Analysis Report
