Is Paychex, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Paychex, Inc. moved from very expensive to fair. The company appears fairly valued based on its current financial metrics. Key ratios include a P/E ratio of 33, an EV to EBITDA of 23.20, and a Price to Book Value of 13.98, which suggest that while the stock is priced reasonably, it does not present a significant discount compared to its peers.
In comparison to its peers, Paychex, Inc. has a P/E ratio of 27.39 when compared to Netflix, Inc. at 52.90 and Automatic Data Processing, Inc. at 45.48, indicating that Paychex is more attractively priced within its sector. Additionally, the PEG ratio of 6.02 suggests that the company's growth prospects may not justify a lower valuation compared to its peers. Over the last year, Paychex has underperformed the S&P 500, with a return of -11.07% compared to the index's 14.08%, reinforcing the notion that while the stock is fairly valued, it may not be the best investment choice at this time.