Paycom Software, Inc. (PAYC) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

PTC, Inc.

Splunk, Inc.

Zoom Video Communications, Inc.

HubSpot, Inc.

Paycom Software, Inc.

ANSYS, Inc.

Roblox Corp.

MongoDB, Inc.

Take-Two Interactive Software, Inc.

Datadog, Inc.

Fair Isaac Corp.

Why is Paycom Software, Inc. ?

Strong Long Term Fundamental Strength with an average Return on Equity (ROE) of 24.01%

Healthy long term growth as Net Sales has grown by an annual rate of 19.86% and Operating profit at 19.43%
Company has a low Debt to Equity ratio (avg) at times

Flat results in Jun 25

INTEREST(9M) At USD 2.6 MM has Grown at 42.08%
NET PROFIT(HY) At USD 228.9 MM has Grown at -27.37%
ROCE(HY) Lowest at 25.76%

With ROE of 22.96%, it has a fair valuation with a 9.61 Price to Book Value

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -28.41%, its profits have fallen by -15.9%

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -28.41% returns in the last 1 year, the stock has also underperformed S&P 500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Paycom Software, Inc. should be less than 10%
Overall Portfolio exposure to Software Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Software Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Paycom Software, Inc. for you?

Medium Risk, Medium Return

Absolute

Risk Adjusted

Volatility

Paycom Software, Inc.

-28.31%

0.34

36.44%

S&P 500

13.22%

0.64

20.20%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

19.86%

EBIT Growth (5y)

19.43%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.29

Sales to Capital Employed (avg)

1.16

Tax Ratio

28.22%

Dividend Payout Ratio

16.82%

Pledged Shares

Institutional Holding

100.00%

ROCE (avg)

44.46%

ROE (avg)

24.01%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

9.61

EV to EBIT

29.98

EV to EBITDA

20.75

EV to Capital Employed

13.14

EV to Sales

8.36

PEG Ratio

Dividend Yield

54.97%

ROCE (Latest)

43.83%

ROE (Latest)

22.96%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

Bullish

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Bullish

Dow Theory

Mildly Bearish

OBV

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

6What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 558.17 MM

RAW MATERIAL COST(Y)

Fallen by -0.86% (YoY

CASH AND EQV(HY)

Highest at USD 1,053 MM

-6What is not working for the Company

INTEREST(9M)

At USD 2.6 MM has Grown at 42.08%

NET PROFIT(HY)

At USD 228.9 MM has Grown at -27.37%

ROCE(HY)

Lowest at 25.76%

Here's what is working for Paycom Software, Inc.

Operating Cash Flow

Highest at USD 558.17 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Cash and Eqv

Highest at USD 1,053 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Raw Material Cost

Fallen by -0.86% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Paycom Software, Inc.

Net Profit

At USD 228.9 MM has Grown at -27.37%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is negative

Net Profit (USD MM)

Interest

At USD 2.6 MM has Grown at 42.08%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Non Operating Income

Highest at USD 0.05 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income