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what it is
Paycom sells cloud software that runs your payroll, HR, benefits, and hiring in one system.
how it gets paid
Last year Paycom Software made $2.1B in revenue. Payroll and tax management was the main engine at $0.84B, or 40% of sales.
why it's growing
Revenue grew 8.9% last year. Indeed, the company’s stock price dropped 25% since our lateseptember review, largely on job market uncertainty affecting the overall human resources industry.
what just happened
Paycom's last reported quarter came in at $2.07 EPS versus a $2.45 estimate, a -15.51% miss.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
90/100 earnings predictability — you can trust these numbers
17.6x trailing p/e — the market's not buying it — or you found a deal
0.9% dividend yield — cash in your pocket every quarter
29.5% return on capital — every dollar works hard here
xvary composite: 53/100 — below average
What they do
Paycom sells cloud software that runs your payroll, HR, benefits, and hiring in one system.
Paycom wins because it puts payroll and HR in one database, so your company is not stitching together five vendors and praying nothing breaks. SaaS (software-as-a-service) → you pay a subscription instead of installing software → so what: that creates recurring revenue and helped Paycom reach $2.1 billion in annual sales. Leaving is painful when payroll, benefits, time tracking, and employee records all live in one place for 37,543 employer clients.
How they make money
$2.1B
annual revenue · their business grew +8.9% last year
Payroll and tax management
$0.84B
Core HR and employee administration
$0.48B
Time, labor, and scheduling
$0.34B
Talent acquisition and management
$0.23B
Benefits and other HR tools
$0.21B
The products that matter
payroll and hcm software
paycom platform
$2.1B revenue · 100% of sales
it's the entire business, generating $2.1B in revenue with a 25.1% net profit margin. if demand slows here, there is no second segment to smooth the quarter.
entire business
Key numbers
27.6%
operating margin
Operating margin → the share of sales left after running the business → so what: Paycom keeps more of each dollar than many software peers.
29.5%
return on capital
Return on capital → profit earned on the money put into the business → so what: Paycom still turns investment into cash at a high rate.
17.6x
trailing p/e
P/E → how much investors pay for each dollar of earnings → so what: this is cheaper than many software names despite 24.0% net margins.
$2.0B
2026 sales est
The forecast is basically flat to slightly down versus the reported $2.1 billion base, which tells you expectations are already subdued.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- net profit margin 24.0% — keeps 24 cents of every dollar in revenue
- return on equity 30% — $0.30 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in PAYC 3 years ago → it's now worth $5,270.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
Paycom's last reported quarter came in at $2.07 EPS versus a $2.45 estimate, a -15.51% miss.
That miss mattered more because investors were already worried about labor-market softness. The full-year business still produced $2.1 billion in revenue with an 82.9% gross margin.
$525M
revenue
$6.02
eps
82.9%
gross margin
the number that mattered
The -15.51% earnings miss mattered most because slower growth stocks lose investor patience fast when execution slips.
-
shares of paycom software have been losing ground of late, falling to a 52-week low.
-
indeed, the company’s stock price dropped 25% since our lateseptember review, largely on job market uncertainty affecting the overall human resources industry.
-
a slight miss on the third-quarter bottom line did not help, either, further disappointing investors.
-
yet, despite labor market concerns, the company should perform well in 2025 and 2026.
-
while adjusted share profits in the september period were a few cents shy of expectations, they still climbed 16% from a year ago, thanks to strong revenues and efficiency gains.
source: company earnings report, 2026
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What could go wrong
the #1 risk is slower hiring and payroll-seat growth.
med
slower hiring means slower payroll growth
paycom sells payroll and hr software, so weaker hiring and softer labor demand can reduce new-customer wins and expansion at existing accounts.
because this page shows one platform generating the full $2.1B revenue base, a labor-market slowdown hits 100% of the business rather than one segment.
med
competition does not need to crush paycom to hurt the stock
adp, workday, and other hcm rivals only need to pressure pricing, win new logos, or keep enterprises from expanding as fast. crowded categories compress narratives first and margins later.
at 17.6x trailing earnings, the market already doubts PAYC deserves a winner-take-most multiple. more share pressure keeps that discount in place.
med
the revenue line is the weak spot in the story
the page shows $2.1B in annual revenue but only a $2B fy2026 estimate. if that reflects real slowing rather than stale timing, the low multiple is not a bargain. it is a verdict.
paycom can keep a 25.1% net margin and still struggle as a stock if investors decide growth has reset to a lower lane.
all three risks point to the same problem: 100% of revenue depends on one payroll and hcm engine, so any slowdown in hiring, demand, or share gains lands on the whole $2.1B base.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next earnings report
the next quarterly earnings report is estimated for may 6, 2026. for this stock, guidance matters as much as the quarter itself.
trend
revenue re-acceleration or not
this page shows $2.1B of annual revenue but a $2B fy2026 estimate. if that gap survives the next update, the slowdown story gets harder to dismiss.
risk
labor-market softness
payroll software follows hiring. if employers slow recruiting, new seat growth and client expansion usually slow next.
metric
institutional sponsorship
317 buyers versus 357 sellers is not panic. it is still net selling. you want that balance to stop drifting the wrong way.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think this stock can keep lagging in the near term.
risk profile
average
stability score 3 — typical risk profile. not a bunker stock, not a chaos stock.
chart momentum
below average
technical score 4 — the trend is still working against you.
earnings predictability
90 / 100
management usually delivers a steady earnings pattern. the business is more predictable than the stock.
source: institutional data
Institutional activity
317 buyers vs. 357 sellers in 3q2025. total institutional holdings: 50.5M shares.
source: institutional data
Price targets
3-5 year target range
$128
$274
$163
current price
$201
target midpoint · +23% from current · 3-5yr high: $335 (+105% · 20% ann'l return)
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