Is Paycom Software, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Paycom Software, Inc. has moved from expensive to fair. Based on the current metrics, the company appears to be fairly valued. Key ratios include a P/E ratio of 42, an EV to EBITDA of 20.75, and a Price to Book Value of 9.61. In comparison, a peer like Paycom Software shows a lower P/E of 33.53 and an EV to EBITDA of 16.85, indicating that while Paycom is fairly valued, it is still priced higher than some of its peers.
In terms of stock performance, Paycom has underperformed relative to the S&P 500 over the 1-week, 1-month, and 3-year periods, with returns of -4.34%, -3.88%, and -38.06%, respectively, compared to the S&P 500's positive returns. However, over the 1-year period, Paycom outperformed the index with a return of 26.68% versus 17.14%. Overall, the valuation suggests that Paycom is fairly positioned in the market.