Paychex, Inc. (PAYX), headquartered in Rochester, New York, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses. With a market cap of $53 billion, the company's services range from calculating payroll and filing tax payments to administering retirement plans and workers' compensation.
Shares of this industry-leading HCM company have underperformed the broader market over the past year. PAYX has gained 20.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 22.3%. However, in 2025, PAYX stock is up 5%, surpassing the SPX’s 4% rise on a YTD basis.
Narrowing the focus, PAYX’s outperformance is apparent compared to the Technology Select Sector SPDR Fund (XLK). The exchange-traded fund has gained about 17.1% over the past year. Moreover, PAYX’s gains on a YTD basis outshine the ETF’s 3.2% returns over the same time frame.
On Dec. 19, PAYX shares closed up more than 1% after reporting its Q2 results. Its adjusted EPS of $1.14 exceeded Wall Street expectations of $1.12. The company’s revenue was $1.32 billion, beating Wall Street forecasts of $1.31 billion.
For the current fiscal year, ending in May, analysts expect PAYX’s EPS to grow 5.7% to $4.99 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 16 analysts covering PAYX stock, the consensus is a “Hold.” That’s based on 13 “Holds,” one “Moderate Sell,” and two “Strong Sells.”
The configuration has been consistent over the past three months.
On Jan. 17, TD Cowen analyst Bryan Bergin maintained a “Hold” rating on PAYX with a price target of $146.
While PAYX currently trades above its mean price target of $139.08, the Street-high price target of $148 suggests a marginal upside potential.
