Is Paychex, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Paychex, Inc. moved from very expensive to fair. Based on the current metrics, the company appears to be fairly valued. The P/E ratio stands at 33, while the EV to EBITDA ratio is 23.20, and the PEG ratio is 6.02, indicating a relatively high valuation compared to its earnings growth potential.
In comparison to peers, Paychex has a lower P/E ratio than Netflix, Inc., which is at 52.90, and a more favorable PEG ratio than Automatic Data Processing, Inc., which has a PEG of 4.81. While Paychex's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -9.74% compared to the S&P 500's 13.30%, its five-year return of 51.15% is more in line with long-term growth expectations.