Rochester, New York-based Paychex, Inc. (PAYX) provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses. With a market cap of $50.7 billion, Paychex's operations span the United States, Europe, and internationally.
Companies worth $10 billion or more are generally described as "large-cap stocks," Paychex fits this bill perfectly. Given the company’s extensive clientele, its valuation above this mark is not surprising. The company serves 745,000+ customers worldwide helping them manage their human resources, payroll, and benefits.
Paychex touched its all-time high of $150.71 on Nov. 11 and is currently trading 5.5% below that peak. PAYX has gained 6.2% over the past three months lagging behind the Technology Select Sector SPDR Fund’s (XLK) 12.2% surge during the same time frame.
Over the longer term, Paychex's performance looks even grimmer. PAYX stock has gained 19.5% on a YTD basis and 14.8% over the past 52 weeks, underperforming XLK’s 22.6% gains in 2024 and 26.4% returns over the past year.
To confirm the recent uptrend, PAYX has traded above its 200-day and 50-day moving averages since mid-July with minor fluctuations.
PAYX stock price soared 4.9% after the release of its better-than-expected Q1 results on Oct. 1. Given that the U.S. labor market is gradually returning to its pre-pandemic levels and wage inflation has moderated, Paychex is off to a solid start in fiscal 2025. Driven by the robust topline performance of its professional employer organization (PEO) and insurance solutions, the company’s total revenues surged 2.5% year-over-year to $1.3 billion, beating Wall Street’s expectations. Meanwhile, Paychex also maintained a strong expense discipline, reporting a notable 1.8% increase in adjusted EPS to $1.16, exceeding analysts’ estimates.
Furthermore, Paychex has continued to invest in its go-to-market capabilities and products to drive innovation that meets the realities of the post-pandemic marketplace. It introduced several new products: Paychex Flex Engage, Paychex Flex Perks, and Paychex Recruiting Copilot, demonstrating the company's approach towards growth and innovation.
Paychex has significantly outpaced its peer Workday, Inc.’s (WDAY) 1.9% decline on a YTD basis and marginal drop over the past 52 weeks.
Among the 18 analysts covering the PAYX stock, the consensus rating is a “Hold.” As of writing Paychex is trading above its mean price target of $135.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart- With Bitcoin Eyeing New Highs, Here Are 3 Ways to Invest
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