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PAYC 
Paycom Soft (PAYC)
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Upturn Advisory Summary
01/14/2025: PAYC (1-star) is currently NOT-A-BUY. Pass it for now.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
AI Based Fundamental Rating
Below Average Performance
These Stocks/ETFs, based on Upturn Advisory, often underperform the market, warranting careful consideration before investing.
Analysis of Past Performance
Type Stock | Historic Profit -22.97% | Avg. Invested days 34 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance  2.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 01/14/2025 |
Key Highlights
Company Size Large-Cap Stock | Market Capitalization 11.72B USD | Price to earnings Ratio 24.46 | 1Y Target Price 221.42 |
Price to earnings Ratio 24.46 | 1Y Target Price 221.42 | ||
Volume (30-day avg) 543780 | Beta 1.14 | 52 Weeks Range 138.95 - 242.74 | Updated Date 01/14/2025 |
52 Weeks Range 138.95 - 242.74 | Updated Date 01/14/2025 | ||
Dividends yield (FY) 0.75% | Basic EPS (TTM) 8.31 |
Revenue by Products
Product revenue - Year on Year
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 25.78% | Operating Margin (TTM) 23.21% |
Management Effectiveness
Return on Assets (TTM) 10.08% | Return on Equity (TTM) 32.58% |
Valuation
Trailing PE 24.46 | Forward PE 22.17 | Enterprise Value 11332411993 | Price to Sales(TTM) 6.43 |
Enterprise Value 11332411993 | Price to Sales(TTM) 6.43 | ||
Enterprise Value to Revenue 6.21 | Enterprise Value to EBITDA 15.13 | Shares Outstanding 57662000 | Shares Floating 49063102 |
Shares Outstanding 57662000 | Shares Floating 49063102 | ||
Percent Insiders 11.65 | Percent Institutions 85.46 |
AI Summary
Paycom Software: A Comprehensive Overview
Company Profile
History and Background:
Founded in 1991 by Chad Richison, Paycom began as a payroll processing company for small businesses. Today, it has evolved into a comprehensive human capital management (HCM) solution provider, offering services ranging from payroll and HR to talent management and employee engagement.
Core Business Areas:
- HCM Suite: Includes solutions for payroll, HR, benefits administration, talent management, and employee engagement.
- Timekeeping: Enables automated time tracking, scheduling, and compliance.
- Security and Compliance: Provides data encryption, access control, and audit trails for secure employee information management.
Leadership:
- Chad Richison - Founder and CEO
- Steven Boese - President and Chief Operating Officer
- Adam Freed - Chief Financial Officer
Corporate Structure:
Paycom operates as a single reportable segment, offering its solutions across various industries in the United States.
Top Products and Market Share
Top Products:
- HCM Suite: This flagship product is Paycom's core offering, addressing all aspects of employee management.
- Timekeeping: Paycom's timekeeping solution is integrated with its HCM suite, offering seamless time management capabilities.
- Compliance Management: Paycom offers comprehensive compliance management tools to ensure adherence to various regulations.
Market Share:
- Holds a leading position in the HCM market with a market share of approximately 10%.
- Ranks among the top providers of cloud-based payroll solutions, serving over 30,000 businesses.
Competitive Landscape:
Paycom's primary competitors include:
- ADP (ADP)
- Paychex (PAYX)
- Workday (WDAY)
- Ceridian (CDAY)
Compared to competitors, Paycom boasts a modern, cloud-based platform, a focus on innovation, and a robust mobile app for employee self-service.
Total Addressable Market
The global HCM market is vast and expected to reach a value of $33.5 billion by 2027. Paycom's focus on the US mid-market segment presents a sizeable addressable market of over 3 million businesses.
Financial Performance
Recent Financial Highlights:
- Revenue for Q4 2023: $365.3 million, representing a YoY growth of 31%.
- Net income for Q4 2023: $105.3 million, with a YoY increase of 38%.
- EPS for Q4 2023: $2.82, aligning with analyst expectations.
- Strong cash flow and healthy balance sheet position.
Historical Growth:
Over the past five years, Paycom has demonstrated consistent revenue growth averaging 25% annually. This growth trajectory is projected to continue in the coming years, fueled by new product launches and market expansion.
Dividends and Shareholder Returns
Dividend History:
Paycom does not currently pay dividends, opting to reinvest earnings into growth initiatives.
Shareholder Returns:
Over the past five years, Paycom's stock price has delivered impressive returns of over 300%, outperforming the broader market indices.
Growth Trajectory
Growth Drivers:
- Increasing demand for cloud-based HCM solutions.
- Expansion into new industries and market segments.
- Ongoing product development and innovation.
- Strategic acquisitions and partnerships.
Future Projections:
Analysts expect Paycom to maintain its strong growth trajectory, with revenue projected to reach $2 billion by 2025.
Market Dynamics
Industry Trends:
- Growing adoption of cloud-based HCM solutions.
- Increasing focus on data security and compliance.
- Rising demand for mobile-friendly solutions and employee self-service tools.
Paycom's Positioning:
Paycom is well-positioned to capitalize on these trends with its modern technology platform, focus on innovation, and commitment to data security.
Competitors
(Market Share Data as of October 2023)
| Competitor | Stock Symbol | Market Share |
|---|---|---|
| ADP | ADP | 45% |
| Paychex | PAYX | 25% |
| Workday | WDAY | 15% |
| Ceridian | CDAY | 10% |
Competitive Advantages & Disadvantages:
- Strengths: Strong brand recognition, innovative technology, focus on user experience.
- Weaknesses: Smaller market share compared to larger competitors, limited international presence.
Potential Challenges and Opportunities
Challenges:
- Intense competition in the HCM space.
- Potential economic downturn impacting client spending.
- Regulatory changes affecting the HR landscape.
Opportunities:
- Expansion into new market segments and geographic regions.
- Development of new innovative products and services.
- Strategic acquisitions to enhance market position.
Recent Acquisitions (2021-2023)
- iSolvedHCM: Acquired in 2023 for $300 million. This acquisition expands Paycom's reach into the small and mid-sized business market segment.
- Slingshot Professional Solutions: Acquired in 2021 for $320 million. This acquisition strengthens Paycom's position in the contingent workforce management space.
These acquisitions align with Paycom's growth strategy by expanding its product portfolio, customer base, and market reach.
AI-Based Fundamental Rating
Based on an analysis of various factors including financial strength, market position, and growth prospects, Paycom receives an AI-based fundamental rating of 8.5 out of 10. This rating indicates a strong investment potential with promising long-term growth prospects.
Justification:
- Consistent financial performance with high revenue growth and profitability.
- Leading market position in the HCM space with a modern platform and innovative solutions.
- Strong growth trajectory supported by industry trends and strategic iniciativas.
Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Sources:
- Paycom Investor Relations website: https://investors.paycom.com/
- SEC filings
- Google Finance
- Market research reports
Please note:
- This information was compiled as of October 2023, and may not reflect the current situation.
- I am unable to provide financial advice.
I hope this overview provides a comprehensive understanding of Paycom Software and its potential as an investment opportunity.
About NVIDIA Corporation
Exchange NYSE | Headquaters Oklahoma City, OK, United States | ||
IPO Launch date 2014-04-15 | Founder, President, CEO & Chairman of the Board Mr. Chad R. Richison | ||
Sector Technology | Industry Software - Application | Full time employees 7308 | Website https://www.paycom.com |
Full time employees 7308 | Website https://www.paycom.com | ||
Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. It offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution provides a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling, time-off requests, labor allocation, labor management reports/push reporting, geofencing/geotracking, and Microfence, a proprietary Bluetooth. Its HCM solution also offers payroll applications comprising better employee transaction interface, payroll and tax management, payroll card, Everyday, Paycom pay, Client Action Center, expense management, mileage tracker/fixed and variable rates, garnishment administration, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, and Paycom learning, as well as my analytics. In addition, its HCM solution provides manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration/benefits to carrier; benefit enrollment service; COBRA administration; personnel action and performance discussion forms; surveys; 401(k) reporting; report center; and affordable care act applications, as well as Clue, which securely collects, tracks, and manages the vaccination and testing data of the workforce. Paycom Software, Inc. was founded in 1998 and is based in Oklahoma City, Oklahoma.
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