QualityDipStocks / Technology · Software
Paycom Software PAYC
Outside our quality screen, so we don’t track its dips. It’s 3% below its 52-week high.
Outside our quality screen, trading well below our fair value estimate, 15% over its Market Value.
- Fair value est.
- $371.37+40%
- Market Value
- $230.81price +15%
- Off 52-wk high
- −3%
- Risk vs market
- Lowbeta 0.02
5 bullish · 5 bearish See why
Repriced or dip?
Near its high
The price is 3% below its 52-week high (Oct 23), but the business held up: net cash (cash minus debt) 0.0% of market cap since the high, shares outstanding unchanged, operating margin 0.0 pts.
Some numbers held up (net cash (cash minus debt) 0.0% of market cap since the high, shares outstanding unchanged, operating margin 0.0 pts), others slipped. The price is 3% below its 52-week high.
The price is 3% below its 52-week high, and the business changed too.
Within 10% of its 52-week high, so there is no dip to judge yet.
Data-based read, not advice.
Priced in
How much growth the market assumed at the 52-week high, the low and today (a reverse DCF).
At the high ($274.59, Oct 23) the price assumed about 9%/yr free-cash-flow growth; at the low ($113.59, Apr 10) about 3%; today about 8%. The last 3 years delivered 21%/yr (free cash flow).
Dashed line: what the last 3 years delivered, 21%/yr (free cash flow)
| High | Low | Now | |
|---|---|---|---|
| Price | $274.59Oct 23 | $113.59Apr 10 | $266.04 |
| Implied growth | +9% | +3% | +8% |
| P/E | 25.9× | 14.1× | 25.0× |
| P/FCF | 21.9× | 15.6× | 21.2× |
| EV/Sales | 6.2× | — | 6.0× |
What this means: the higher the implied growth, the more the price already counts on. If today's number sits well below what the business has delivered, the market expects less than its track record.
How it’s computed
Reverse DCF: the same 10-year free-cash-flow model as our fair value estimate (9.5% discount rate, growth for years 1–5 fading to 3% by year 10, 3% after), solved for the growth that makes it equal the market value at each price. For the high and the low we use only the filings that were public on that day, so nothing from a later report leaks back. Market value = that close × diluted shares. P/E = market value / 12-month net income; Price / FCF = market value / 12-month free cash flow; EV / Sales = (market value + debt − cash) / 12-month revenue. Hidden when the share count moved over 20% (split, merger), free cash flow is negative, or the company reports in another currency.
Valuation
What we estimate it's worth, and how it ranks on value vs every stock we cover.
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 14.3% ±2 points. Bear = 10.5% and 12.3%; bull = 8.5% and 16.3% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
What the price implies To be worth today’s price, PAYC’s free cash flow would need to grow about 8% a year for five years; our estimate uses 14%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 31 to Nov 2, 252 sessions). Beta = how much PAYC moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 3.7× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.02
- Volatility
- 48% vs 13% SPY
- Correlation SPY
- 0.01
- Correlation QQQ
- −0.09
How it ranks
Where PAYC stands vs every one of the 1,996 stocks we cover that has the number. Longer bar = better.
Top quarter on 3 of 6 measures
- Discount to fair value estimate40% · price below our base caseTop 25%of 1,314
- Free cash flow yield4.7% · free cash flow vs market capTop 43%of 1,391
- Dividends + buybacks yield0.6% · cash paid out or used to retire shares, vs market capLowest 27%of 1,836
- Revenue growth, last 12 months+9.2% · vs the 12 months beforeLowest 48%of 1,814
- Operating margin30% · of sales kept as operating profitTop 11%of 1,288
- Return on invested capital36% · profit per dollar of capitalTop 9%of 838
From SEC filings and our fair value estimate model. A ranking, not advice.
Valuation details
DCF $371.37 · MV $230.81 · FCF value $232.78
Assumes 14.3% growth for 5 years (revenue grew 14.3% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $12.53 a share (trailing 12 months to Jun 30, 2026), from the 10-Q filed Aug 6, 2026. Net debt $702M, not deducted.
Fundamentals
The business itself: sales, profits, cash and debt, from SEC filings.
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationOur DCF fair value estimate is $371.37, 40% above the price.
Cash returnsShare count down 18.8% in a year.
ProfitabilityReturn on equity of 41% over the last 12 months.
Cash returnsFree cash flow grew 60% over the last 12 months vs the 12 months before.
ProfitabilityReturn on invested capital of 36%, above the 9.5% discount rate our DCF uses.
Top bearish points 5 of 5
Balance sheetDebt / equity of 1.6×, above the 0.4× median for the 139 Technology companies we cover.
GrowthDiluted EPS fell 9.4% in the last fiscal year, below the 16% median for the 168 Technology companies we cover.
ValuationPrice / book of 21.4×, above the 5.9× median for the 261 Technology companies we cover.
Cash returnsDividend yield of 0.6%, below the 1.0% median for the 93 Technology companies we cover.
ValuationTrades 15.3% above its Market Value of $230.81, the average price paid since the Aug 5 filing.
All fundamentals
P/E 25.0 · FCF yield 4.7% · ROE 41%
Valuation
- P/E
- 25.0×Technology median 33.0×
- Price / FCF
- 21.2×
- FCF yield
- 4.7%
- EV / EBITDA
- 15.3×
- Price / sales
- 5.70×
- Price / book
- 21.37×
- Market cap
- $12.2Bprice × diluted shares
- Enterprise value
- $12.9B
Growth
- Revenue, 12 months
- $2.1B
- Sales growth, 12 months
- +9.2%vs the 12 months before
- Sales growth, 3 yrs
- +14.3%/yrfrom FY2022
- Diluted EPS, 12 months
- $9.45
- EPS growth, last FY
- −9.4%
- Net income, 12 months
- $488M
- Net income growth
- +17%12 months vs before
Profitability
- Gross margin
- 83.7%
- Operating margin
- 30.3%
- Net margin
- 22.8%
- FCF margin
- 26.9%
- Return on equity
- 41%
- Return on invested capital
- 36%
Balance sheet
- Cash & short-term inv.
- $198M
- Total debt
- $900M
- Net cash
- −$702M
- Debt / equity
- 1.57×
- Interest coverage
- 39.8×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $575M
- FCF growth, 12 months
- +60%
- Dividend yield
- 0.63%$77M paid
- Payout ratio
- 16%
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- −18.8%diluted shares vs a year ago
- Stock-based comp
- $90M
Trailing 12 months to Jun 30, 2026; balance sheet at Jun 30, 2026. From Paycom Software’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
The business
FCF $0.4B · Sales +10%
- Free cash flow, 12 months$0.4B
- Free-cash-flow yield4.7%
- Free-cash-flow margin20%
- Gross margin88%
- Operating margin32%
- Return on invested capital39%
- Return on equity41%
- Sales growth (latest quarter vs year-ago quarter)+10%
- Net debt / EBITDA1.1×
Chart & levels
Where the price is vs its key levels and trends.
Key levels
Every level vs today’s $266.04
- 52-wk lowlowest close, 1 year$113.59−57.3%
- Market Valueavg paid since Aug 5$230.81−13.2%
- PriceMon Nov 2 close$266.04you are here
- 52-wk highhighest close, 1 year$274.59+3.2%
- Fair value est.base case$371.37+39.6%
Momentum & 52-week range
RSI 67 · 5 days −0.8%
Signals
Reversal signal setups, the public ledger and the next earnings date.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
Next report
Nov 4
- DateWed Nov 4, after the close
- Consensus EPS$2.37
- Year-ago EPS$1.39
- QuarterSep/2026
From Nasdaq’s earnings calendar. A report resets Market Value.
PAYC is outside our quality screen
One text when a published rule fires on one of the 332 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.
Voices & buzz
Who is talking about it, and how it compares with peers.
Who’s talking about it
Notable investors, executives, analysts and public figures on Paycom Software in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 3, 1:01 PM ET.
Compare with peers
Closest in size in Software
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.