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Oklahoma City, Oklahoma-based Paycom Software, Inc. (PAYC) provides cloud-based human capital management (HCM) solutions delivered as software-as-a-service for small to mid-sized companies. Valued at $12.7 billion by market cap, the company offers data analytical software products to manage the employment life cycle from recruitment to retirement. The leading HCM software provider is expected to announce its fiscal first-quarter earnings for 2025 after the market closes on Wednesday, May 7.
Ahead of the event, analysts expect PAYC to report a profit of $2.16 per share on a diluted basis, down 49.2% from $4.25 per share in the year-ago quarter. The company beat the consensus estimates in each of the last four quarters.
For the full year, analysts expect PAYC to report EPS of $6.99, down 18.9% from $8.62 in fiscal 2024. However, its EPS is expected to rise 14.3% year over year to $7.99 in fiscal 2026.
PAYC stock has outperformed the S&P 500’s ($SPX) 8.2% gains over the past 52 weeks, with shares up 20.2% during this period. Similarly, it outperformed the Technology Select Sector SPDR Fund’s (XLK) 3.7% uptick over the same time frame.
PAYC’s strong performance is driven by the integration of AI in its products, such as Beti and GONE, which is delivering significant productivity gains for clients. The AI agent launched six months ago has reduced service tickets and improved response rates, enhancing client satisfaction and efficiency. Paycom's automation focus sets it apart, with tools like Beti and GONE leading to cost savings and increased productivity for clients. The company's efficient customer acquisition, with a CAC payback period of 8.6 months, shows its strong product offering and brand reputation. This allows Paycom to invest in new initiatives while increasing sales and marketing efforts.
On Feb. 12, PAYC shares closed up more than 1% after reporting its Q4 results. Its adjusted EPS of $2.32 surpassed Wall Street expectations of $1.99. The company’s revenue was $493.8 million, topping Wall Street forecasts of $481.1 million. PAYC expects full-year revenue in the range of $2.02 billion to $2.04 billion.
Analysts’ consensus opinion on PAYC stock is cautious, with a “Hold” rating overall. Out of 18 analysts covering the stock, three advise a “Strong Buy” rating, and 15 give a “Hold.” While PAYC currently trades above its mean price target of $221.93, the Street-high price target of $250 suggests a upside potential of 10.7%.
