Paychex Inc.

Paychex Inc.

PAYX

Market Cap$53.02B
Close$

Compare to Similar Companies

P/E RatioDividendsReturn on EquityPrice-to-SalesDebt-to-Equity
Paychex Inc.Paychex Inc.30.82.66%44%10.60.1

Earnings Call Q2 2025

December 19, 2024 - AI Summary

Strong Revenue Growth: Paychex reported a 5% increase in total revenue to $1.3 billion for Q2 FY2025, with a 7% growth rate when excluding the impact from the expiration of the Employee Retention Tax Credit (ERTC) program. Management Solutions revenue grew by 3%, while PEO and Insurance Solutions revenue increased by 7%. This growth reflects solid performance across the company's Human Capital Management (HCM) solutions.
Earnings Performance: Diluted earnings per share (EPS) grew by 6% year-over-year to $1.14. Adjusted diluted EPS also increased by 6%. The company's operating income margin increased to 40.9%, up approximately 60 basis points year-over-year, suggesting improved operational efficiency amid a challenging environment, although continued diligent management was noted in light of the ERTC expiration headwinds.
Resilience in PEO Business: The Professional Employer Organization (PEO) segment is performing well, with high-double-digit growth in contracted revenue and strong client retention. However, enrollment in health plans like the MPP in Florida was flat year-over-year, highlighting challenges in the healthcare cost environment that may impact pass-through revenue, but the firm's overall PEO value proposition remains strong with increased insurance penetration.

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$109.78

Current Fair Value

26% downside

Overvalued by 26% based on the discounted cash flow analysis.

Share Statistics

Market cap$53.02 Billion
Enterprise Value$52.02 Billion
Dividend Yield$3.92 (2.66213921901528%)
Earnings per Share$4.69
Beta1
Outstanding Shares360,000,000

Return

Return on Equity-
Return on Assets-
Return on Invested Capital-

Valuation & Multiples

P/E Ratio30.83
PEG584.92
Price to Sales10.59
Price to Book Ratio14.83
Enterprise Value to Revenue9.69
Enterprise Value to EBIT23.11
Enterprise Value to Net Income30
Total Debt to Enterprise0
Debt to Equity0.05

Revenue Sources

No data

Insider Trades

ESG Score

No data

About Paychex Inc.

14,300 employees
CEO: Martin Mucci

Paychex, Inc. is a leading provider of integrated human capital management solutions for human resources, payroll, benefits, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with ...