One-glance verdict
Within fair range
$395.34 our estimate vs market $274.59
Wall Street consensus: $227.00 (-42.6% lower than our fair-value estimate)
31% below our estimate
Fundamentals snapshot
Paycom Software, Inc.
PAYC · NYQ · Technology · Software - Application
Current price
$274.59
52-week range
$104.90 - $275.22
Market cap
$12.38B
Balance sheet
Watch
166.82x Strong cushion
Net debt $784.80M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 4.3% last year.
- Reward Returns 41.1% on equity, ahead of 60% of its peers.
- Reward Free cash flow was positive in 10/10 years.
What this company does
Paycom Software, Inc.
Paycom sells a software service that helps businesses manage all their employee needs, from hiring to paying them and handling benefits. The money mostly comes from businesses paying a regular fee to use this service, which is important because it means the company gets predictable income. This predictable income helps Paycom plan for the future and grow its business.
How the company got here
Paycom was founded in 1998 by Chad Richison, who saw a need for a more efficient way to handle payroll and human resources. At the time, many businesses relied on manual processes and separate software systems, which could be complicated and prone to errors. Richison's vision was to create a single, online platform that could manage the entire employee lifecycle, from hiring to retirement. The company started as an online payroll service and gradually expanded its offerings to include a full suite of human capital management (HCM) tools. Paycom went public on the New York Stock Exchange in 2014, marking a significant milestone in its growth.
What it actually does
Paycom provides a cloud-based software service, known as Software-as-a-Service (SaaS), that helps businesses manage all aspects of their employees' lifecycle. Think of it as a digital assistant for everything related to your workforce. This includes tasks like hiring new employees, processing their paychecks, managing benefits, tracking their time, and handling performance reviews. The core idea is to have all this information in one place, making it easier for companies to operate efficiently and accurately.
Payroll and Payroll-Related Services
This is the heart of Paycom's business. It handles the complex process of calculating employee wages, deducting taxes, and ensuring employees are paid accurately and on time. This segment also includes managing payroll tax filings, which are government-mandated reports on taxes withheld from employee paychecks. Paycom's solution aims to automate these tasks, reducing the potential for errors and saving businesses time. This is a significant part of Paycom's revenue, as most companies need these services consistently.
Time and Labor Management
This part of Paycom's offering helps businesses track employee work hours, manage schedules, and handle requests for time off. For companies with hourly workers, accurately tracking time is crucial for correct payroll. This segment also includes tools for scheduling employees and managing labor costs by allocating staff effectively. It ensures that the hours employees work are correctly recorded and fed into the payroll system.
Talent Acquisition and Onboarding
When a company needs to hire someone, this is where Paycom steps in. It provides tools to help manage the hiring process, from advertising job openings and tracking applicants to conducting background checks and getting new hires set up in the system. Onboarding refers to the process of integrating new employees into the company. This segment helps make the hiring and onboarding experience smoother for both the company and the new employee.
HR Management and Employee Administration
This broad category covers a range of essential HR functions. It includes managing employee records, handling benefits enrollment (like health insurance and retirement plans), ensuring compliance with labor laws and government regulations, and managing employee documents. Paycom's platform aims to centralize these administrative tasks, making it easier for HR departments to operate efficiently and keep accurate records.
What management is betting on now
Paycom's leadership is focused on continuing to automate HR and payroll processes, making them even more efficient for businesses. A key strategy is empowering employees to manage more of their own data and tasks within the system, such as completing their own payroll before it's finalized. They are also expanding their services globally, allowing companies to manage their workforce across different countries from a single platform. Additionally, Paycom is investing in artificial intelligence (AI) to create smarter tools that can help businesses with complex decisions and improve employee engagement.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$44.57M
FY2024 Q4
$109.04M
FY2025 Q1
$144.80M
FY2025 Q2
$60.80M
FY2025 Q3
$79.80M
FY2025 Q4
$122.60M
FY2026 Q1
$182.60M
FY2026 Q2
$190.10M
Revenue
$531.20M
Net income
$107.40M
Diluted EPS
2.34
Operating cash flow
$213.80M
Free cash flow
$190.10M
Fetching…
Sources
Revenue
$571.90M
Net income
$155.70M
Diluted EPS
3.04
Operating cash flow
$213.80M
Free cash flow
$182.60M
Fetching…
Sources
Revenue
$544.30M
Net income
$113.80M
Diluted EPS
2.06
Operating cash flow
$196.10M
Free cash flow
$122.60M
Fetching…
Sources
Revenue
$493.30M
Net income
$110.70M
Diluted EPS
1.96
Operating cash flow
$177.80M
Free cash flow
$79.80M
Fetching…
Sources
Revenue
$483.60M
Net income
$89.50M
Diluted EPS
1.58
Operating cash flow
$122.50M
Free cash flow
$60.80M
Fetching…
Sources
Revenue
$530.50M
Net income
$139.40M
Diluted EPS
2.48
Operating cash flow
$182.50M
Free cash flow
$144.80M
Fetching…
Sources
Revenue
$493.87M
Net income
$113.56M
Diluted EPS
2.04
Operating cash flow
$160.39M
Free cash flow
$109.04M
Fetching…
Sources
Revenue
$451.93M
Net income
$73.28M
Diluted EPS
1.31
Operating cash flow
$92.78M
Free cash flow
$44.57M
Fetching…
Sources
Is it cheap or expensive?
Fair value $395.34 vs current price $274.59
Wall Street consensus is the average analyst price target: $227.00 (-42.6% lower than our fair-value estimate).
Our most-likely fair value is $395.34 a share — about 44.0% away from today's price of $274.59, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $784.8M. Interest coverage 166.8x.
Net debt
$784.80M
Interest coverage
166.82x
Paycom Software, Inc.'s profit covers its interest bill about 166.8 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
PAYC
BASELINE
Paycom Software, Inc.
Total debt $982.80M Interest coverage 166.82x This is the baseline the peer rows are being compared against.
Total debt $5.51B Interest coverage 12.58x -92% vs PAYC Carries about 13.3x less debt cushion than PAYC.
Total debt $3.77B Interest coverage 8.98x -95% vs PAYC Carries about 18.6x less debt cushion than PAYC.
Total debt $478.00M Interest coverage -0.42x -100% vs PAYC This peer has almost no interest-payment cushion compared with PAYC.
What you should know
The case for and against PAYC
3 Rewards
0 Risks
Rewards
-
Revenue grew 4.3% last year.
-
Returns 41.1% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
29.06x
Forward P/E
19.66x
P/B
20.90x
P/S
5.78x
EV/EBITDA
17.61x
PEG ratio
1.45x
Profitability
How much profit each dollar creates
Gross margin
88.1%
Operating margin
31.7%
Net margin
22.8%
ROE
41.1%
ROA
8.8%
Health
Liquidity and balance-sheet strength
Debt / equity
1.72x
Current ratio
1.07x
Quick ratio
0.08x
Total debt
$982.80M
Total cash
$198.00M
Growth
How the business has been compounding
Revenue TTM
$2.14B
Revenue 5Y CAGR
18.1%
EPS TTM
9.45
EPS 5Y CAGR
18.6%
Cash flow
How much cash the business throws off
Operating CF TTM
$801.50M
Free CF TTM
$408.00M
FCF margin
19.1%
Dividend
Shareholder payout
Yield
0.5%
Payout ratio
15.9%
Last ex-div date
2026-08-24