Paycom Software (PAYC) Stock Sinks As Market Gains: What You Should Know

·3-min read

Paycom Software (PAYC) closed the most recent trading day at $417.21, moving -0.9% from the previous trading session. This move lagged the S&P 500's daily gain of 0.14%. Elsewhere, the Dow gained 0.25%, while the tech-heavy Nasdaq lost 0.34%.

Heading into today, shares of the maker of human-resources and payroll software had lost 3.77% over the past month, lagging the Computer and Technology sector's gain of 2.85% and the S&P 500's gain of 4.32% in that time.

Investors will be hoping for strength from Paycom Software as it approaches its next earnings release. The company is expected to report EPS of $1.08, up 28.57% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $275.78 million, up 24.81% from the prior-year quarter.

PAYC's full-year Zacks Consensus Estimates are calling for earnings of $4.44 per share and revenue of $1.05 billion. These results would represent year-over-year changes of +27.22% and +24.36%, respectively.

Any recent changes to analyst estimates for Paycom Software should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.06% higher. Paycom Software is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Paycom Software is holding a Forward P/E ratio of 94.73. For comparison, its industry has an average Forward P/E of 67.29, which means Paycom Software is trading at a premium to the group.

We can also see that PAYC currently has a PEG ratio of 3.79. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Software stocks are, on average, holding a PEG ratio of 3.57 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 189, which puts it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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