A Business at a Glance
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Paycom Software, Inc.
PAYC
$8.2B
Mkt Cap
$145.35
+4.79%
Paycom Software, Inc. (PAYC) has a current P/E ratio of 18.1, compared to its historical median P/E of 44.1. The stock is currently considered Cheap based on its historical valuation range.
Paycom Software, Inc. (PAYC) has a 5-year average return on invested capital (ROIC) of 39.4%. This indicates strong capital allocation and a potential competitive advantage.
Paycom Software, Inc. (PAYC) has a market capitalization of $6.8B. It is classified as a mid-cap stock.
Yes, Paycom Software, Inc. (PAYC) pays a dividend with a trailing twelve-month yield of 1.20%. The company also returns capital through share buybacks, with a buyback yield of 4.81%.
Based on historical P/E analysis, Paycom Software, Inc. (PAYC) appears cheap. The current P/E of 18.1 is 59% below its historical median of 44.1. The estimated fair value CAGR (P/E method) is 22.1%.
Paycom Software, Inc. (PAYC) operates in the Services-Prepackaged Software industry, within the Technology sector.
Paycom Software, Inc. (PAYC) reported annual revenue of $2.1 billion in its most recent fiscal year, based on SEC EDGAR filings.
Paycom is a leading cloud-based Software-as-a-Service (SaaS) provider of comprehensive Human Capital Management (HCM) solutions that manage the complete employment lifecycle from recruitment to retirement. The company's core offering is built on a single, unified database architecture that integrates payroll, talent acquisition, talent management, HR management, and time and labor management applications, eliminating the need for clients to maintain multiple systems or databases. Paycom generates the majority of its revenues from payroll applications, with pricing determined by employee headcount and the number of applications utilized, enabling clients to align HCM spending with their evolving needs. The company sells directly through an internally trained sales force based in offices across the United States, serving approximately 39,200 clients ranging from 50 to 10,000 or more employees, and maintains high client loyalty with annual revenue retention rates of 91% and 90% for 2025 and 2024, respectively. Paycom's competitive advantages include its proprietary cloud-based architecture that enables rapid development and deployment of applications, its research and development team based in Oklahoma and Texas providing cost-effective talent access, and its focus on delivering personalized support through trained specialists assigned to specific clients. The company's solution provides clients with data analytics and business intelligence capabilities, including its industry-first Direct Data Exchange (DDX) tool for measuring employee usage efficiencies and its AI-powered IWant engine for instant employee data access, while also offering enhanced employee experience through self-service technology, mobile applications with biometric security, and manager-focused tools like Manager on-the-Go.
【AI-driven competitive positioning】 Management expects customers to increasingly demand AI capabilities in HCM platforms, viewing AI as both a competitive necessity and a retention tool while exploring potential pricing realization opportunities over time. The company is focused on extending its technological lead and attacking the remaining 95% of the addressable market, with expectations for continued margin expansion driven by automation and operational efficiencies. Management anticipates stabilization in employment growth and expects execution of its growth strategy—including new office openings that have ramped faster than historical precedent, expansion of existing client relationships through additional application adoption, and targeting of larger employers—to drive incremental revenue opportunities throughout 2026. The company maintains a long-term outlook and is prepared to invest in opportunities that enhance client ROI, supported by strong EBITDA margins and cash generation, while continuing to focus on automation of administrative tasks and maintaining world-class client service.
| Metric | Target | Period |
|---|---|---|
| Total Revenue | $2.175 billion to $2.195 billion | FY2026 |
| Recurring and Other Revenue Growth | 7%-8% year-over-year | FY2026 |
| Adjusted EBITDA | $950 million to $970 million | FY2026 |
Total Revenue (FY2026): “We expect total revenues to be between $2.175 billion and $2.195 billion, or approximately 6.5% year-over-year growth at the midpoint.”
Recurring and Other Revenue Growth (FY2026): “We expect full year recurring and other revenue to be up 7%-8% year-over-year.”
Adjusted EBITDA (FY2026): “Finally, full year adjusted EBITDA is expected to be between $950 million-$970 million, representing an adjusted EBITDA margin of 44% at the midpoint of the range.”
Generated solely from the company's own reports listed below — not from third-party data. Hallucination risk is low. · Sources: 10-K, Q4 FY2025 Earnings Call, Q3 FY2025 Earnings Call, Q2 FY2025 Earnings Call, Q1 FY2025 Earnings Call
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 2.1B | 2.1B | 1.9B | 1.7B | 1.4B | 1.1B |
| Net Income | 470M | 453M | 502M | 341M | 281M | 196M |
| EPS | $9.01 | $8.08 | $8.92 | $5.88 | $4.84 | $3.37 |
| Free Cash Flow | 446M | 408M | 341M | 292M | 232M | 199M |
| ROIC | 32.4% | 31.6% | 46.8% | 42.5% | 43.4% | 32.9% |
| Gross Margin | 83.4% | 83.2% | 82.2% | 83.7% | 84.5% | 97.0% |
| Debt/Equity | 0.83 | 0.05 | 0.05 | 0.08 | 0.02 | 0.03 |
| Dividends/Share | $1.75 | $1.51 | $1.51 | $1.12 | - | - |
| Operating Income | 592M | 567M | 634M | 451M | 379M | 254M |
| Operating Margin | 28.3% | 27.6% | 33.7% | 26.6% | 27.5% | 24.0% |
| ROE | 57.9% | 27.4% | 34.9% | 27.4% | 27.1% | 25.3% |
| Shares Outstanding | 47M | 56M | 56M | 58M | 58M | 58M |
Paycom Software, Inc. passes 9 of 9 quality checks, indicating strong fundamentals.
Paycom Software, Inc. trades at 18.1x trailing earnings, compared to its 15-year median P/E of 44.1x, suggesting it is currently Cheap relative to its historical range. On a free-cash-flow basis, the stock trades at 19.3x vs a median of 48.1x. The company's 5-year average ROIC is 39.4% with a gross margin of 86.1%. Total shareholder yield (dividends + buybacks) is 6.0%. At current prices, the estimated annualized return to fair value is +21.3%.
Paycom Software, Inc. (PAYC) has a net profit margin of 22.1%. This is a strong margin indicating high profitability.
Paycom Software, Inc. (PAYC) generated $408 million in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
Paycom Software, Inc. (PAYC) has a debt-to-equity ratio of 0.05. This indicates a conservatively financed balance sheet.
Paycom Software, Inc. (PAYC) reported earnings per share (EPS) of $8.08 in its most recent fiscal year.
Paycom Software, Inc. (PAYC) has a return on equity (ROE) of 27.4%. This indicates the company generates strong returns for shareholders.
Paycom Software, Inc. (PAYC) has a 5-year average gross margin of 86.1%. This high margin suggests strong pricing power and a potential competitive moat.
The Ledger Terminal provides 14 years of financial data for Paycom Software, Inc. (PAYC), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
Paycom Software, Inc. (PAYC) has a book value per share of $30.86, based on its most recent annual SEC filing.
Based on recent SEC filings and earnings disclosures, Management expects customers to increasingly demand AI capabilities in HCM platforms, viewing AI as both a competitive necessity and a retention tool while exploring potential pricing realization opportunities over time. The company is focused on extending its technological lead and attacking the remaining 95% of the addressable market, with expectations for continued margin expansion driven by automation and operational efficiencies. Management anticipates stabilization in employment growth and expects execution of its growth strategy—including new office openings that have ramped faster than historical precedent, expansion of existing client relationships through additional application adoption, and targeting of larger employers—to drive incremental revenue opportunities throughout 2026. The company maintains a long-term outlook and is prepared to invest in opportunities that enhance client ROI, supported by strong EBITDA margins and cash generation, while continuing to focus on automation of administrative tasks and maintaining world-class client service.
Based on recent SEC filings and earnings calls, Paycom Software, Inc. (PAYC) has provided the following forward guidance: Total Revenue: $2.175 billion to $2.195 billion (FY2026); Recurring and Other Revenue Growth: 7%-8% year-over-year (FY2026); Adjusted EBITDA: $950 million to $970 million (FY2026).