Is Paychex, Inc. overvalued or undervalued?

As of 21 November 2025, the valuation grade for Paychex, Inc. has moved from fair to expensive. The company appears to be overvalued based on its current financial metrics. Key ratios include a P/E ratio of 33, a Price to Book Value of 13.98, and an EV to EBITDA of 23.20. In comparison, peers such as Netflix, Inc. have a P/E of 52.90, while Automatic Data Processing, Inc. shows a more attractive P/E of 45.48.
Paychex's recent stock performance has been underwhelming, with a year-to-date return of -20.51%, significantly lagging behind the S&P 500's return of 12.26% over the same period. This underperformance reinforces the notion that the stock may be overvalued relative to its peers and the broader market.