A Business at a Glance
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PAYCHEX INC
PAYX
$41.1B
Mkt Cap
$113.55
+2.61%
PAYCHEX INC (PAYX) has a current P/E ratio of 24.8, compared to its historical median P/E of 23.7. The stock is currently considered Fair based on its historical valuation range.
PAYCHEX INC (PAYX) has a 5-year average return on invested capital (ROIC) of 45.6%. This indicates strong capital allocation and a potential competitive advantage.
PAYCHEX INC (PAYX) has a market capitalization of $40.7B. It is classified as a large-cap stock.
Yes, PAYCHEX INC (PAYX) pays a dividend with a trailing twelve-month yield of 3.82%. The company also returns capital through share buybacks, with a buyback yield of 0.89%.
Based on historical P/E analysis, PAYCHEX INC (PAYX) appears fair. The current P/E of 24.8 is 5% above its historical median of 23.7. The estimated fair value CAGR (P/E method) is 9.1%.
PAYCHEX INC (PAYX) operates in the Services-Engineering, Accounting, Research, Management industry, within the Industrials sector.
PAYCHEX INC (PAYX) reported annual revenue of $5.6 billion in its most recent fiscal year, based on SEC EDGAR filings.
Paychex is an industry-leading human capital management (HCM) company serving approximately 800,000 clients across the U.S. and parts of Europe, delivering integrated technology and advisory solutions spanning payroll processing, HR management, talent acquisition and management, workforce management, benefits administration, retirement solutions, and insurance offerings. The company operates through three primary HCM technology platforms—SurePayroll for digitally driven small businesses, Paychex Flex for small and medium-sized businesses, and Paycor for larger enterprises with complex needs—alongside comprehensive HR outsourcing through administrative services organization (ASO) and professional employer organization (PEO) subsidiaries that serve as co-employers and assume certain workers' compensation and health insurance risks. Paychex's business model combines cloud-based SaaS delivery with extensive HR advisory services provided by approximately 250 compliance experts and over 650 HR business professionals, generating over 50% of revenues from solutions beyond payroll processing; the company markets through direct and virtual sales forces supported by digital lead generation and multi-channel initiatives, with clients typically bound by service agreements terminable with 30 days' notice. The company's competitive moat derives from its breadth of integrated solutions covering the full employee lifecycle, proprietary technology platforms with advanced AI and data analytics capabilities, deep compliance expertise, and strong client retention rates in the range of 82–83%, positioning it as an essential partner for organizations navigating complex regulatory environments and evolving workforce dynamics.
【AI-driven growth acceleration】 Management expects continued momentum from the integration of the Paycor acquisition, which exceeded initial synergy targets and is driving cross-sell opportunities in ASO, retirement, and PEO solutions into the Paycor client base, with larger-than-anticipated deal sizes and accelerating bookings and broker referrals. The company is advancing its WISE intelligent engine and agentic payroll solutions to reduce client wait times while maintaining accuracy, positioning these capabilities as meaningful long-term value drivers through direct monetization and indirect benefits including stronger upsell, improved retention, and greater pricing power. Management remains confident in the durability of its business model, with robust revenue growth in retirement, ASO, and PEO highlighting a long secular growth runway, and expects continued strength in the PEO business supported by medical inflation tailwinds and high single-digit worksite employee growth that outpaces industry peers. The company is investing in modernized infrastructure, including a new modern tax engine to be integrated with WISE, and continues to pursue strategic acquisitions aligned with its overall strategy, though no major acquisitions are expected in the near term.
| Metric | Target | Period |
|---|---|---|
| Total Revenue Growth | 5%-6% | FY2027 |
| Management Solutions Revenue Growth | 5%-6% | FY2027 |
| PEO and Insurance Solutions Revenue Growth | 6%-7% | FY2027 |
| Interest on Funds Held for Clients | $195 million-$205 million | FY2027 |
| Adjusted Operating Income Margin | approximately 44% | FY2027 |
| Adjusted Diluted Earnings Per Share Growth | 7%-9% | FY2027 |
Total Revenue Growth (FY2027): “For fiscal 2027, we expect total revenue growth in the range of 5%-6%.”
Management Solutions Revenue Growth (FY2027): “Management Solutions revenue growth is also expected to be in the range of 5%-6%.”
PEO and Insurance Solutions Revenue Growth (FY2027): “PEO and Insurance Solutions revenue growth will be in the range of 6%-7%.”
Interest on Funds Held for Clients (FY2027): “Interest on funds held for clients is expected to be in the range of $195 million-$205 million.”
Adjusted Operating Income Margin (FY2027): “Adjusted operating income margins are expected to be approximately 44%”
Adjusted Diluted Earnings Per Share Growth (FY2027): “Adjusted diluted earnings per share is expected to grow in the range of 7%-9%.”
Generated solely from the company's own reports listed below — not from third-party data. Hallucination risk is low. · Sources: 10-K, Q2 FY2027 Earnings Call, Q1 FY2027 Earnings Call, Q4 FY2026 Earnings Call, Q3 FY2026 Earnings Call
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 6.3B | 5.6B | 5.3B | 5.0B | 4.6B | 4.1B |
| Net Income | 1.6B | 1.7B | 1.7B | 1.6B | 1.4B | 1.1B |
| EPS | $4.56 | $4.58 | $4.67 | $4.30 | $3.84 | $3.03 |
| Free Cash Flow | 2.1B | 1.7B | 1.7B | 1.6B | 1.5B | 1.1B |
| ROIC | 24.8% | 31.8% | 53.5% | 49.6% | 51.8% | 41.4% |
| Gross Margin | - | 72.4% | 72.0% | 71.0% | 70.6% | 68.7% |
| Debt/Equity | 1.23 | 1.20 | 0.22 | 0.23 | 0.26 | 0.27 |
| Dividends/Share | $4.34 | $4.02 | $3.65 | $3.26 | $2.77 | $2.52 |
| Operating Income | 2.3B | 2.2B | 2.2B | 2.0B | 1.8B | 1.5B |
| Operating Margin | 36.9% | 39.6% | 41.2% | 40.6% | 39.9% | 36.0% |
| ROE | 40.8% | 41.8% | 46.3% | 47.3% | 46.2% | 38.3% |
| Shares Outstanding | 358M | 362M | 362M | 362M | 363M | 362M |
| Metric | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | |||||||||||||
| Revenue | 2.5B | 2.7B | 3.0B | 3.2B | 3.4B | 3.8B | 4.0B | 4.1B | 4.6B | 5.0B | 5.3B | 5.6B | 6.3B |
| Gross Margin | N/A | N/A | N/A | N/A | 69.9% | 68.8% | 68.3% | 68.7% | 70.6% | 71.0% | 72.0% | 72.4% | N/A |
| R&D | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| SG&A | 804M | 878M | 948M | 980M | 1.1B | 1.2B | 1.3B | 1.3B | 1.4B | 1.5B | 1.6B | 1.8B | 2.3B |
| EBIT | 983M | 1.1B | 1.1B | 1.3B | 1.3B | 1.4B | 1.5B | 1.5B | 1.8B | 2.0B | 2.2B | 2.2B | 2.3B |
| Op. Margin | 39.0% | 38.5% | 38.8% | 39.8% | 38.2% | 36.3% | 36.1% | 36.0% | 39.9% | 40.6% | 41.2% | 39.6% | 36.9% |
| Net Income | 628M | 675M | 757M | 826M | 994M | 1.0B | 1.1B | 1.1B | 1.4B | 1.6B | 1.7B | 1.7B | 1.6B |
| Net Margin | 24.9% | 24.6% | 25.6% | 26.2% | 29.4% | 27.4% | 27.2% | 27.1% | 30.2% | 31.1% | 32.0% | 29.7% | 25.8% |
| Non-Recurring | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -400K | -1.3M | -33M | -3.7M | -3.7M |
| Returns on Capital | |||||||||||||
| ROIC | 43.2% | 46.7% | 47.5% | 44.7% | 49.7% | 44.1% | 40.9% | 41.4% | 51.8% | 49.6% | 53.5% | 31.8% | 24.8% |
| ROE | 35.3% | 37.9% | 40.9% | 39.9% | 43.4% | 41.6% | 40.7% | 38.3% | 46.2% | 47.3% | 46.3% | 41.8% | 40.8% |
| ROA | 10.0% | 10.5% | 11.7% | 12.4% | 13.5% | 12.5% | 12.7% | 12.3% | 14.8% | 15.4% | 16.2% | 12.3% | 9.3% |
| Cash Flow | |||||||||||||
| Op. Cash Flow | 881M | 895M | 1.0B | 960M | 1.3B | 1.3B | 1.4B | 1.3B | 1.6B | 1.7B | 1.9B | 1.9B | 2.3B |
| Free Cash Flow | 797M | 792M | 921M | 866M | 1.1B | 1.1B | 1.3B | 1.1B | 1.5B | 1.6B | 1.7B | 1.7B | 2.1B |
| Owner Earnings | 750M | 757M | 869M | 798M | 1.1B | 1.0B | 1.2B | 1.0B | 1.3B | 1.5B | 1.7B | 1.6B | 1.8B |
| CapEx | 84M | 103M | 98M | 94M | 154M | 124M | 127M | 118M | 134M | 143M | 161M | 192M | 230M |
| Maint. CapEx | 105M | 107M | 115M | 127M | 138M | 182M | 210M | 192M | 192M | 177M | 177M | 210M | 415M |
| Growth CapEx | 0 | 0 | 0 | 0 | 16M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| D&A | 105M | 107M | 115M | 127M | 138M | 182M | 210M | 192M | 192M | 177M | 177M | 210M | 415M |
| CapEx/OCF | 9.5% | 11.5% | 9.6% | 9.8% | 12.1% | 9.7% | 8.8% | 9.1% | 8.9% | 8.4% | 8.5% | 10.1% | 9.9% |
| Capital Allocation | |||||||||||||
| Dividends Paid | 511M | 552M | 607M | 662M | 740M | 827M | 889M | 909M | 1000M | 1.2B | 1.3B | 1.4B | 1.6B |
| Dividend Yield | 5.0% | 4.7% | 4.6% | 4.1% | 4.2% | 3.9% | 3.7% | 3.4% | 2.6% | 3.1% | 3.3% | 3.0% | 3.8% |
| Share Buybacks | 250M | 182M | 108M | 166M | 143M | 57M | 172M | 156M | 145M | 0 | 169M | 105M | 362M |
| Buyback Yield | 2.4% | 1.4% | 0.7% | 1.0% | 0.8% | 0.2% | 0.8% | 0.5% | 0.4% | N/A | 0.4% | 0.2% | 0.9% |
| Stock-Based Comp | 26M | 31M | 35M | 35M | 45M | 46M | 47M | 53M | 53M | 63M | 61M | 112M | 137M |
| Debt Repayment | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 48M | 48M |
| Balance Sheet | |||||||||||||
| Net Debt | N/A | N/A | N/A | N/A | -424M | 84M | -34M | -227M | -418M | -787M | -686M | 3.3B | 3.2B |
| Cash & Equiv. | 153M | 170M | 132M | 185M | 358M | 674M | 905M | 995M | 370M | 1.2B | 1.5B | 1.6B | 1.8B |
| Long-Term Debt | N/A | N/A | N/A | N/A | N/A | 796M | 797M | 797M | 798M | 798M | 799M | 4.5B | 4.6B |
| Debt/Equity | 2.58 | 2.62 | 2.37 | 2.19 | 0.00 | 0.30 | 0.32 | 0.27 | 0.26 | 0.23 | 0.22 | 1.20 | 1.23 |
| Interest Coverage | 893.4 | 1505.1 | 1042.4 | 501.6 | 331.2 | 77.9 | 62.4 | 40.8 | 50.3 | 55.4 | 58.3 | 20.9 | 8.7 |
| Equity | 1.8B | 1.8B | 1.9B | 2.2B | 2.4B | 2.6B | 2.8B | 2.9B | 3.1B | 3.5B | 3.8B | 4.1B | 4.0B |
| Total Assets | 6.4B | 6.5B | 6.4B | 6.8B | 7.9B | 8.7B | 8.6B | 9.2B | 9.6B | 10.5B | 10.4B | 16.6B | 17.5B |
| Total Liabilities | 4.6B | 4.7B | 4.5B | 4.9B | 5.6B | 6.1B | 5.8B | 6.3B | 6.5B | 7.1B | 6.6B | 12.4B | 13.5B |
| Intangibles | 41M | 32M | 70M | 58M | 141M | 399M | 331M | 276M | 225M | 187M | 195M | 1.9B | 1.7B |
| Retained Earnings | 958M | 894M | 926M | 902M | 1.3B | 1.4B | 1.4B | 1.4B | 1.7B | 2.0B | 2.2B | 2.3B | 2.0B |
| Working Capital | 564M | 515M | 498M | 547M | 597M | 833M | 1.0B | 1.2B | 1.3B | 1.7B | 1.9B | 2.0B | 2.0B |
| Current Assets | 5.0B | 5.1B | 4.9B | 5.3B | 5.9B | 5.7B | 5.5B | 6.2B | 6.6B | 7.5B | 7.3B | 8.9B | 9.9B |
| Current Liabilities | 4.4B | 4.6B | 4.4B | 4.7B | 5.3B | 4.8B | 4.4B | 4.9B | 5.3B | 5.8B | 5.3B | 7.0B | 7.9B |
| Per Share Data | |||||||||||||
| EPS | 1.71 | 1.85 | 2.09 | 2.28 | 2.75 | 2.86 | 3.04 | 3.03 | 3.84 | 4.30 | 4.67 | 4.58 | 4.56 |
| Owner EPS | 2.04 | 2.08 | 2.40 | 2.20 | 3.03 | 2.89 | 3.28 | 2.80 | 3.71 | 4.05 | 4.59 | 4.37 | 4.93 |
| Book Value | 4.84 | 4.89 | 5.28 | 6.15 | 6.52 | 7.24 | 7.70 | 8.14 | 8.51 | 9.65 | 10.50 | 11.41 | 11.20 |
| Cash Flow/Share | 2.40 | 2.45 | 2.81 | 2.65 | 3.53 | 3.52 | 3.99 | 3.48 | 4.38 | 4.71 | 5.24 | 5.25 | 5.73 |
| Dividends/Share | 1.40 | 1.52 | 1.68 | 1.84 | 2.06 | 2.30 | 2.48 | 2.52 | 2.77 | 3.26 | 3.65 | 4.02 | 4.34 |
| Shares Out. | 367.0M | 364.8M | 362.1M | 362.4M | 361.5M | 361.7M | 361.2M | 362.2M | 362.7M | 362.2M | 362.0M | 361.9M | 358.3M |
| Valuation | |||||||||||||
| P/E Ratio | 16.7 | 19.3 | 19.3 | 20.2 | 19.0 | 24.7 | 20.1 | 29.1 | 28.8 | 23.1 | 24.4 | 33.3 | 24.9 |
| P/FCF | 13.2 | 16.4 | 15.9 | 19.1 | 16.8 | 22.2 | 16.8 | 28.0 | 27.6 | 23.0 | 23.7 | 32.3 | 19.5 |
| EV/EBIT | N/A | N/A | N/A | N/A | 14.3 | 18.7 | 15.1 | 21.8 | 21.9 | 16.9 | 18.0 | 25.8 | 18.8 |
| Price/Book | 5.9 | 7.3 | 7.7 | 8.5 | 8.0 | 9.7 | 7.9 | 10.8 | 13.0 | 10.3 | 10.8 | 13.4 | 10.1 |
| Price/Sales | 4.1 | 4.3 | 4.5 | 5.1 | 5.2 | 5.6 | 5.9 | 6.6 | 8.3 | 7.6 | 7.6 | 8.6 | 6.4 |
| FCF Yield | 7.6% | 6.1% | 6.3% | 5.2% | 5.9% | 4.5% | 6.0% | 3.6% | 3.6% | 4.3% | 4.2% | 3.1% | 5.1% |
| Market Cap | 10.5B | 13.0B | 14.6B | 16.5B | 18.9B | 25.5B | 22.0B | 31.9B | 40.2B | 35.9B | 41.2B | 55.3B | 40.7B |
| Avg. Price | 28.03 | 32.33 | 36.61 | 44.46 | 48.68 | 58.62 | 66.53 | 74.18 | 105.26 | 105.45 | 111.15 | 132.90 | 113.55 |
| Year-End Price | 28.57 | 35.66 | 40.44 | 45.53 | 52.28 | 70.60 | 60.96 | 88.12 | 110.70 | 99.24 | 113.74 | 152.73 | 113.55 |
PAYCHEX INC passes 7 of 9 quality checks, indicating strong fundamentals.
PAYCHEX INC trades at 24.8x trailing earnings, compared to its 15-year median P/E of 23.7x, suggesting it is currently Fair relative to its historical range. On a free-cash-flow basis, the stock trades at 24.0x vs a median of 22.6x. The company's 5-year average ROIC is 45.6% with a gross margin of 70.9%. Total shareholder yield (dividends + buybacks) is 4.7%. At current prices, the estimated annualized return to fair value is +7.1%.
PAYCHEX INC (PAYX) has a net profit margin of 29.7%. This is a strong margin indicating high profitability.
PAYCHEX INC (PAYX) generated $1.7 billion in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
PAYCHEX INC (PAYX) has a debt-to-equity ratio of 1.20. This indicates moderate leverage.
PAYCHEX INC (PAYX) reported earnings per share (EPS) of $4.58 in its most recent fiscal year.
PAYCHEX INC (PAYX) has a return on equity (ROE) of 41.8%. This indicates the company generates strong returns for shareholders.
PAYCHEX INC (PAYX) has a 5-year average gross margin of 70.9%. This high margin suggests strong pricing power and a potential competitive moat.
The Ledger Terminal provides 18 years of financial data for PAYCHEX INC (PAYX), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
PAYCHEX INC (PAYX) has a book value per share of $11.41, based on its most recent annual SEC filing.
Based on recent SEC filings and earnings disclosures, Management expects continued momentum from the integration of the Paycor acquisition, which exceeded initial synergy targets and is driving cross-sell opportunities in ASO, retirement, and PEO solutions into the Paycor client base, with larger-than-anticipated deal sizes and accelerating bookings and broker referrals. The company is advancing its WISE intelligent engine and agentic payroll solutions to reduce client wait times while maintaining accuracy, positioning these capabilities as meaningful long-term value drivers through direct monetization and indirect benefits including stronger upsell, improved retention, and greater pricing power. Management remains confident in the durability of its business model, with robust revenue growth in retirement, ASO, and PEO highlighting a long secular growth runway, and expects continued strength in the PEO business supported by medical inflation tailwinds and high single-digit worksite employee growth that outpaces industry peers. The company is investing in modernized infrastructure, including a new modern tax engine to be integrated with WISE, and continues to pursue strategic acquisitions aligned with its overall strategy, though no major acquisitions are expected in the near term.
Based on recent SEC filings and earnings calls, PAYCHEX INC (PAYX) has provided the following forward guidance: Total Revenue Growth: 5%-6% (FY2027); Management Solutions Revenue Growth: 5%-6% (FY2027); PEO and Insurance Solutions Revenue Growth: 6%-7% (FY2027); Interest on Funds Held for Clients: $195 million-$205 million (FY2027); Adjusted Operating Income Margin: approximately 44% (FY2027), plus 1 additional metric.