Is Paychex, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Paychex, Inc. has moved from very expensive to fair. The company is currently fairly valued based on its metrics. The P/E ratio stands at 33, while the EV to EBITDA ratio is 23.20, and the PEG ratio is 6.02, indicating that the stock is reasonably priced compared to its earnings growth potential.
In comparison to peers, Paychex, Inc. has a P/E ratio of 27.39, which is more favorable than Netflix, Inc. at 52.90 but higher than Automatic Data Processing, Inc. at 45.48. This suggests that while Paychex is not the cheapest option, it is positioned better than some competitors. Over the past year, Paychex has underperformed the S&P 500, returning -11.07% compared to the index's 14.08%, which reinforces the notion that the stock may be fairly valued given its recent performance.