Paycom Software PAYC
United StatesTechnology · Software - ApplicationUSD
220.24 USD (−1.5%)
17 analysts
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Paycom Software is a technology company that offers cloud-based software for payroll and human resources management, helping businesses automate and manage the entire employee lifecycle.
Key points
from its scores- ✓High-quality business9.2
- ✓Strong growth7.9
- ✓Good share-price trend7.4
- ✕Little or no dividend4.0
AI analysis
bottom line, main risk, context and newsHold or buy on pullbacks, given its solid moat, high profitability, and reasonable valuation for expected growth.
Paycom shows solid financial health (net debt/EBITDA of 1.07) and exceptional quality (ROIC of 43.12%, gross margin of 88.06%), with earnings growth of 48.10% that, while strong, does not seem unsustainable. Its valuation is reasonable (forward P/E of 16.01) for a software company with such a wide moat.
The main risk is a slowdown in revenue growth (9.80%) if competition in the payroll software market intensifies or if the company fails to expand its customer base.
Context and risks
Paycom has no material exposure to current macro factors. Its payroll and human capital management software business generates very high margins (31.7% operating) and a healthy balance sheet (net debt/EBITDA of 1.07), insulating it from interest rate and commodity pressures. There is no recent news to alter the risk profile.
Is Paycom Software stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades 27% below the Technology median on average.
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 23.7 | 31.3 | −24% |
| EV / EBITDA | 14.5 | 20.4 | −29% |
| Price / book | 17.0 | 6.3 | +170% |
| Price / sales | 4.7 | 5.3 | −11% |
Sector: median of the 283 Technology companies analysed. In bold, the multiples used for the comparison.
Valuation score: 6.7 out of 10 (median for Technology: 5.3).
Average analyst target: 220.24 USD, −1.5% versus the price.
A discount may reflect more risk or slower growth than its sector: Financial health 6.9 (sector 6.9), Growth 7.9 (sector 7.5).
Classic formulas with standard assumptions (10.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Technology medianValuation
- P/E
- 23.7
- Forward P/E
- 16.0
- EV / EBITDA
- 14.5
- Price / book
- 17.0
- Price / sales
- 4.7
- PEG
- 1.18
- Market cap
- 10.1B USD
- Enterprise value
- 10.7B USD
Profitability
- ROE
- 41.1%
- ROA
- 8.8%
- ROIC (approx.)
- 43.1%
- Gross margin
- 88.1%
- Operating margin
- 31.7%
- Net margin
- 22.8%
- Free cash flow
- 423.7M USD
- FCF yield
- 4.2%
- Cash conversion
- 58%
Solvency
- Total debt
- 982.8M USD
- Net debt
- 784.8M USD
- Cash
- 198.0M USD
- EBITDA
- 735.1M USD
- Net debt / EBITDA
- 1.07
- Debt / equity
- 171.97
- Current ratio
- 1.07
- Quick ratio
- 0.08
Growth
- Revenue growth
- +9.8%
- Earnings growth
- +48.1%
- EPS (TTM)
- 9.45 USD
- EPS (forward)
- 13.97 USD
Dividend
- Dividend yield
- 0.7%
- Payout
- 15.9%
Risk and market
- Beta
- 0.83
- Analyst consensus
- Hold (17)
- Target price
- 220.24 USD
- 52-week range
- 104.90 – 244.98
Recent news
All PAYC news →Compare it with its sector
All 283 in Technology →Frequently asked questions about Paycom Software
Is Paycom Software stock cheap or expensive?
On P/E and EV / EBITDA, it trades 27% below the Technology median on average. Valuation score: 6.7 out of 10 (median for Technology: 5.3). Average analyst target: 220.24 USD, −1.5% versus the price. This is not investment advice.
What score does Paycom Software get on MeridIAn Screener?
It scores 7.5 out of 10, rank 56 of 2,130 (better than 97% of the companies analysed). Its strongest category is Quality / Moat (9.2) and its weakest, Dividend (4.0). Analysis of 08/10/2026.
What is Paycom Software's P/E ratio?
Its P/E is 23.7: the share price equals 23.7 times earnings per share over the last 12 months. The Technology median is 31.3. Based on the earnings analysts expect, the forward P/E is 16.0.
How much is Paycom Software worth on the stock market?
Its market capitalisation is 10.1B USD and its enterprise value, debt included, is 10.7B USD.
How much debt does Paycom Software have?
Its net debt (debt minus cash) is 784.8M USD. That is 1.07 times its EBITDA; the Technology median is 0.20.
Does Paycom Software pay a dividend?
Yes: its dividend yield is 0.67% and it pays out 16% of its earnings.
How has Paycom Software stock performed over the last year?
It has risen 12.9% over the last year, excluding dividends. Over the last 52 weeks it has traded between 104.90 and 244.98 USD. Past performance does not guarantee future results.
What do analysts think of Paycom Software?
17 analysts cover it; their average recommendation is “Hold” and their average target is 220.24 USD (−1.5% versus the price). It is an estimate, not market data.