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Paychex

NASDAQ: PAYX

Stock price

104.46 USD

(-11.97%) 5 years

Human Resource & Employment ServicesStaffing & Employment Services

Financial Performance

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5Y price score: (15)

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The price score is a basic measure of the stock's performance against the S&P 500 Index over a five-year period.

A score of 100 indicates that the stock did as well as the S&P 500 Index.

A score below 100 means the stock underperformed the index, while a score above 100 means it outperformed the S&P 500.

10Y return: 131.9%

DATE RANGE:

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85.4

52-week range

129.2

104.46

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Required return / cost of capital
%
FCFF terminal growth rate
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Your fair value & Margin of safety

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Valuation

Free Cash Flow Yield

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FCF Yield TTM = Trailing Twelve Months free cash flow per share / current market price per shareLearn more

5.4 %

Dividend Yield TTM

4.3 %

Market cap $

$ 37,155

Price / Earnings TTM

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P/E TTM = current market price per share / Trailing Twelve Months diluted earnings per shareLearn more

20.8

Price / Book TTM

10

PEG TTM

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Price/Earnings-to-Growth ratio = P/E TTM divided by most recent annual diluted earnings per share growth rateLearn more

3.1

Earnings growth and return

LTM

5YR

10YR

Total return (price & dividends)

(14.3) %

1.7 %

131.8 %

Free cash flow per share growth

(45.3) %

103.8 %

154 %

Earnings per share growth

14.2 %

61.4 %

134 %

Founded: 1,971

Employees: 16,500

Business Summary:Founded in 1971 and headquartered in Rochester, New York, Paychex, Inc. delivers comprehensive human capital management (HCM) solutions. The company primarily serves small to medium-sized enterprises (SMEs) across the United States, Europe, and India, addressing their needs in human resources, payroll administration, employee benefits, and insurance. Its diverse service portfolio includes: Payroll Management: Encompassing core payroll processing, payroll tax administration, employee payment facilitation, and ensuring compliance with regulations like new-hire reporting and garnishment processing. Human Resources Solutions: Providing support for employer compliance, HR and employee benefits administration, risk management outsourcing, and even the availability of professionally trained on-site HR representatives. Retirement Services: Offering full administration for retirement plans, which covers implementation, ongoing adherence to government regulations, reporting for both participants and employers, online access capabilities, electronic funds transfers, and other administrative tasks. Cloud-based HR Software: A suite of software products designed for efficient HR administration, including tools for benefits management, time and attendance tracking, digital communication, recruitment, and onboarding processes. Additional Business Services: This category features plan administration outsourcing, state unemployment insurance services, and various support functions for SMBs such as payroll funding and outsourcing (including payroll processing, invoicing, and tax preparation), payment processing solutions, financial wellness programs, and a resource center for small business loans. Insurance Offerings: Providing both property and casualty coverage, which includes workers' compensation, business-owner policies, cybersecurity protection, and commercial auto insurance, alongside health and benefits coverage like medical, dental, vision, and life insurance. Paychex primarily distributes its services through its dedicated direct sales team.

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Fair Value Reference Estimate

Latest Earnings Call Takeaways

2027 Q1 (Sep 23, 2026)

1) Strategic Focus on AI and Advisory Solutions
- Paychex is emphasizing three growth drivers: data and AI leadership, go-to-market evolution, and advisory differentiation.
- The company is leveraging its proprietary workforce data and AI capabilities through its WISE platform, which now utilizes over 50 trillion data points to enhance operational efficiency and decision-making for clients.
- Recent product launches include WISE Hire, an AI-driven recruiting solution aimed at helping SMBs streamline hiring processes.

2) Financial Performance Overview
- Total revenue for Q1 FY27 increased by 6% to $1.6 billion, driven by strong growth in PEO and Insurance Solutions, which saw a 12% increase to $368 million.
- Management Solutions revenue grew by 4% to $1.2 billion, supported by product penetration and price realization.
- Operating margins improved by 280 basis points to 38%, with adjusted operating margins rising by 130 basis points to 42%.
- Diluted earnings per share increased by 14% to $1.21, while adjusted diluted earnings per share rose by 10% to $1.34.

3) Challenges and Market Dynamics
- The company is cautious about future growth due to potential challenges in the macroeconomic environment and the upcoming enrollment periods for PEO.
- While PEO and Insurance Solutions are expected to continue strong growth, Management Solutions may face tougher comparisons in the second half of the fiscal year.
- The company is observing a shift in client behavior, with increased shopping for competitive health benefits due to rising costs, which could impact retention and pricing strategies.

4) Operational Plans and Guidance
- For FY27, Paychex expects PEO and Insurance Solutions revenue growth to be in the range of 7% to 8%, reflecting continued strength in PEO.
- Interest on funds held for clients is projected to be between $200 million and $210 million, influenced by recent interest rate changes.
- The company is reaffirming its full-year guidance of 5% to 6% total revenue growth, with expectations for a stronger second half driven by ongoing execution of its strategic initiatives.

5) Investor Considerations
- The earnings call highlighted a successful execution of the go-to-market strategy, with increased referrals and a significant uptick in ASO to PEO conversions.
- Despite some concerns about potential downsells in a challenging macro environment, the company reported record retention rates in PEO and strong demand for advisory solutions.
- The transcript lacks specific figures on the exact number of ASO to PEO conversions and detailed segment performance expectations for Q2 FY27, which could provide further clarity for investors.

Bottom line: Paychex is positioned for continued growth through its strategic focus on AI and advisory solutions, with strong financial performance in Q1 FY27. However, investors should remain cautious about potential macroeconomic headwinds and the impact of upcoming enrollment periods on growth and retention.

Annual Reports, Presentations And IR Contacts

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Paychex — Financial Overview, Stock Price, Market Cap

Paychex is a company. Founded in 1971. As of October 9, 2026, the company's market capitalization is $37154631556 with a current stock price of $104.46.