Paycom Software PAYC is scheduled to report first-quarter 2024 results on May 1.
The company projects revenues between $494 million and $497 million for the first quarter. The Zacks Consensus Estimate for revenues is pegged at $495.9 million, indicating an increase of 9.8% year over year. The consensus mark for earnings is pegged at $2.43 per share, suggesting a 1.2% decline from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $218-$222 million in the quarter to be reported.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.9%.
Let’s see how things have shaped up for the upcoming announcement.
Paycom Software, Inc. Price and EPS Surprise 
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
Factors to Note
Paycom’s first-quarter results are likely to have benefited from the robust demand for its latest offerings, the addition of new logos and high-margin recurring revenues. Our estimate for the company’s recurring revenues is pegged at $488.4 million, suggesting year-over-year growth of 9.9%.
PAYC’s employee usage strategy, efforts on sales and investments might have contributed to sales growth in the first quarter of 2024. Furthermore, the company earlier announced its plans to strengthen its advertising and marketing efforts to generate more demo leads and virtual meetings, and ensure growth in sales close rates. These factors are likely to have contributed to the market share gains for Paycom.
The company expects the strong adoption of its Beti solution. Notably, Beti enables employees to manage all their payroll requirements, including timecards, benefits, expenses and vacation requests. The solution helps employees rectify forms before submission. This solution reduces hassles and saves time for its users. New client additions to Beti’s present user-base are expected to have driven the top line in the first quarter.
Nevertheless, PAYC’s quarterly results are expected to have been affected by macroeconomic challenges and business disruptions caused by uncertainties developed by global conflicts. Moreover, enterprises are postponing their large IT expenditures due to the softening global economy caused by ongoing macroeconomic and geopolitical challenges. These factors might have hurt the headcount across its customer base in the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Paycom this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Paycom has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Per our model, Arista Networks ANET, Docebo DCBO and Amazon.com AMZN have the right combination of elements to post an earnings beat in their upcoming releases.
Arista Networks has an Earnings ESP of +2.49% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Arista Networks have gained 12.4% year to date. ANET is set to report first-quarter 2024 results on May 7.
Docebo has an Earnings ESP of +8.00% and a Zacks Rank #3 at present.
Shares of Docebo have lost 7.6% year to date. DCBO is set to report first-quarter 2024 results on May 9.
Amazon has an Earnings ESP of +7.51% and a Zacks Rank #2 at present.
Shares of Amazon have jumped 18.2% year to date. AMZN is set to report first-quarter 2024 results on Apr 30.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
