Is Paychex, Inc. overvalued or undervalued?

As of 11 June 2025, the valuation grade for Paychex, Inc. has moved from fair to attractive, indicating a more favorable assessment of its worth. The company is currently considered undervalued. Key ratios include a P/E ratio of 33, an EV to EBITDA of 23.20, and a ROE of 42.58%.
In comparison to peers, Paychex has a P/E ratio of 31.34, which is lower than Automatic Data Processing, Inc. at 47.94, suggesting it may be undervalued relative to its industry. Additionally, while Netflix, Inc. is deemed very expensive with a P/E of 57.44, Paychex's PEG ratio of 6.02 indicates that its growth prospects may not be fully reflected in its current price. Notably, Paychex has outperformed the S&P 500 over the past year, with a return of 20.08% compared to the index's 10.26%, reinforcing its attractive valuation.