Paychex (NASDAQ:PAYX) Posts Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Paychex (NASDAQ:PAYX) issued its earnings results on Wednesday. The business services provider reported $1.71 earnings per share for the quarter, topping analysts’ consensus estimates of $1.68 by $0.03, Briefing.com reports. Paychex had a net margin of 26.45% and a return on equity of 46.38%. The business had revenue of $1.81 billion for the quarter, compared to the consensus estimate of $1.78 billion. During the same period in the previous year, the company earned $1.49 earnings per share. The firm’s revenue for the quarter was up 19.9% on a year-over-year basis.

Paychex Trading Up 3.6%

NASDAQ PAYX opened at $93.90 on Wednesday. The company has a market cap of $33.71 billion, a price-to-earnings ratio of 21.32 and a beta of 0.91. Paychex has a 52 week low of $86.89 and a 52 week high of $161.24. The business has a 50 day moving average price of $97.72 and a 200-day moving average price of $111.51. The company has a quick ratio of 1.27, a current ratio of 1.27 and a debt-to-equity ratio of 1.17.

Paychex Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, February 27th. Investors of record on Wednesday, January 28th were paid a dividend of $1.08 per share. This represents a $4.32 dividend on an annualized basis and a yield of 4.6%. The ex-dividend date of this dividend was Wednesday, January 28th. Paychex’s dividend payout ratio is 97.96%.

Paychex declared that its Board of Directors has initiated a stock repurchase program on Friday, January 16th that permits the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization permits the business services provider to buy up to 2.5% of its stock through open market purchases. Stock repurchase programs are usually an indication that the company’s board believes its shares are undervalued.

Institutional Trading of Paychex

Several hedge funds have recently bought and sold shares of the business. Acumen Wealth Advisors LLC bought a new position in Paychex during the 4th quarter valued at $34,000. Wealth Watch Advisors INC purchased a new stake in shares of Paychex during the 3rd quarter valued at $42,000. DV Equities LLC purchased a new position in shares of Paychex in the 4th quarter worth about $51,000. Sfam LLC bought a new position in Paychex during the fourth quarter valued at about $72,000. Finally, Litman Gregory Wealth Management LLC bought a new position in Paychex during the fourth quarter valued at about $73,000. Institutional investors and hedge funds own 83.47% of the company’s stock.

Wall Street Analyst Weigh In

PAYX has been the topic of several recent research reports. Jefferies Financial Group set a $110.00 target price on shares of Paychex in a report on Friday, December 19th. Wolfe Research decreased their price target on Paychex from $130.00 to $115.00 and set an “underperform” rating on the stock in a research report on Wednesday, December 10th. Cantor Fitzgerald raised shares of Paychex to a “strong sell” rating in a research report on Tuesday, January 27th. Guggenheim began coverage on shares of Paychex in a report on Thursday, March 19th. They issued a “neutral” rating on the stock. Finally, Weiss Ratings restated a “hold (c)” rating on shares of Paychex in a research report on Monday, December 29th. One equities research analyst has rated the stock with a Buy rating, fourteen have given a Hold rating and four have issued a Sell rating to the company. According to data from MarketBeat.com, Paychex has an average rating of “Reduce” and a consensus price target of $121.38.

More Paychex News

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: Q3 results beat estimates—Paychex posted $1.71 adjusted EPS and $1.81B revenue, both above consensus, with solid margin and ROE metrics; the print drove pre-market gains. Paychex reports double-digit growth in fiscal Q3, beats estimates
• Positive Sentiment: Company slide deck and press release confirm broad-based growth across core segments and nearly 20% revenue growth y/y, supporting the quality of the beat. Paychex press release / slides
• Neutral Sentiment: Analysts had been preparing for a double-digit bottom-line quarter (consensus ~ $1.67 EPS, $1.78B revenue), and some downgrades/forecast changes ahead of the print contributed to pre-release weakness. Paychex gears up for Q3 print
• Neutral Sentiment: Investors are watching Paycor integration execution—management commentary and integration progress will likely drive sentiment in coming quarters. Paychex set to report earnings as Paycor integration in focus
• Neutral Sentiment: Short-interest reports in the newsfeed appear inconsistent/zeroed out and are not presenting a clear market signal at this time. MarketBeat PAYX overview
• Negative Sentiment: Cantor Fitzgerald maintains a sell rating on PAYX, presenting near-term downward pressure as some investors reassess valuation after a large one-year decline. Cantor Fitzgerald sticks to sell rating
• Negative Sentiment: Commentary and analysis questioning whether PAYX offers value after a ~35% one-year share decline may keep downward valuation pressure until investors see sustained post-acquisition growth. Is Paychex offering value after decline?

About Paychex

Paychex, Inc, founded in 1971 by B. Thomas “Tom” Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company’s core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers’ compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.