Paycom Software Set to Release Q3 Earnings Amid Mixed Analyst Sentiment
With a market cap of $9.6 billion, Paycom Software, Inc. (PAYC) offers cloud-based human capital management (HCM) solutions tailored for small to mid-sized businesses throughout the U.S. The company’s platform combines payroll, HR, and talent management services, enhancing workforce management from hiring to retirement. Based in Oklahoma City, Oklahoma, Paycom is scheduled to report its Q3 earnings after the market closes on Wednesday, October 30.
Analyst Expectations for Earnings
Ahead of the earnings announcement, analysts anticipate that Paycom Software will present a profit of $1.22 per share, reflecting a decrease of 7.6% compared to last year’s figure of $1.32 per share. Notably, Paycom has a history of beating Wall Street’s EPS forecasts, having exceeded estimates in the last four quarters. In the previous quarter, the company surpassed consensus expectations by 6.2%.
Projected Growth for Upcoming Fiscal Years
For fiscal 2024, analysts predict Paycom Software will report an EPS of $6.67, marking a 13.1% increase from $5.90 in fiscal 2023. Looking ahead to fiscal 2025, EPS is expected to grow further by 7.1% year-over-year to reach $7.14.
Stock Performance and Market Comparisons
PAYC stock is down 21.1% year-to-date, underperforming the S&P 500 Index’s ($SPX) 22.1% gains and the Industrial Select Sector SPDR Fund’s (XLI) 21.9% returns during the same period.
Recent Earnings Report and Analyst Ratings
After its Q2 earnings announcement on July 31, Paycom Software’s stock saw a slight increase. The company reported better-than-expected revenue of $437.5 million alongside adjusted earnings of $1.62 per share. Additionally, recurring revenue, which contributed 98.4% of total sales, increased by 9.1% year-over-year, indicating strong demand for its services. Following this announcement, Paycom raised its full-year adjusted EBITDA guidance, easing concerns regarding rising operating expenses and a cautious forecast for Q3 revenue.
Analyst Consensus and Current Trading Status
The overall consensus on Paycom Software’s stock leans towards caution, with a “Hold” rating prevalent among analysts. Of the 19 analysts reviewing the stock, two recommend a “Strong Buy” while 17 suggest a “Hold” rating. Currently, PAYC is trading below the average analyst price target of $181.54.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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