Paycom Software Inc. Set to Release Q4 Earnings: Key Insights and Analyst Predictions
Oklahoma City-based Paycom Software, Inc. (PAYC) specializes in cloud-based human capital management (HCM) software-as-a-service (SaaS) solutions. With a market cap of $11.6 billion, the company currently serves over 36,000 clients across the U.S., Canada, Mexico, the U.K., and Ireland.
Attention on Upcoming Earnings Announcement
Paycom is scheduled to announce its fourth-quarter earnings on Wednesday, February 5. Analysts project a non-GAAP profit of $1.62 per share, reflecting a 13.3% increase from the $1.43 achieved in the same quarter last year. Notably, the company has either met or exceeded Wall Street’s earnings expectations for the last four quarters. In the most recent quarter, the adjusted earnings per share (EPS) dipped slightly to $1.31, yet surpassed analysts’ forecasts by 9.2%.
Future Earnings Forecasts
Looking ahead to fiscal 2024, analysts anticipate Paycom will report an adjusted EPS of $6.88, a 16.6% rise from $5.90 in fiscal 2023. Projections for fiscal 2025 suggest a more modest growth rate, with expected earnings reaching $7.16 per share, marking a 4.1% year-over-year increase.
Stock Performance and Market Comparisons
Over the past year, PAYC stock has gained just 1.6%. This performance falls short of the Technology Select Sector SPDR Fund’s (XLK) gain of 18.2% and the S&P 500 Index’s (SPX) impressive 22% rise within the same period.
Recent Earnings Results Affecting Analyst Sentiment
PAYC shares surged 21.4% on the trading day following the release of favorable Q3 results on October 30. The increase in recurring revenues propelled overall revenue to $451.9 million, an 11.2% year-over-year growth that surpassed expectations. Additionally, the company demonstrated effective expense management, even as research and development expenditures rose 21.6% to over $63 million. Consequently, operating income rose by 8.2% year-over-year to $104.9 million.
Analysts Maintain Cautious Outlook
Despite these positive indicators, analysts approach Paycom’s future with caution. The stock holds a consensus “Hold” rating. Of the 18 analysts covering Paycom, only two endorse a “Strong Buy,” while 16 recommend holding. The average price target sits at $219.38, indicating a 9.3% upside from current price levels.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
The opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
