QualityDipStocks / Industrials · Diversified Commercial Services
Paychex PAYX
Not in a dip by our rules: 12% below its 52-week high.
A quality company trading below our fair value estimate, 5% over its Market Value.
- Fair value est.
- $126.56+13%
- Market Value
- $106.34price +5%
- Off 52-wk high
- −12%
- Risk vs market
- Lowbeta −0.08
5 bullish · 5 bearish See why
Key levels
Every level vs today’s $112.12
- 52-wk lowlowest close, 1 year$85.57−23.7%
- Market Valueavg paid since Sep 23$106.34−5.2%
- PriceFri Oct 30 close$112.12you are here
- Fair value est.base case$126.56+12.9%
- 52-wk highhighest close, 1 year$127.34+13.6%
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 9.2% ±2 points. Bear = 10.5% and 7.2%; bull = 8.5% and 11.2% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price sits inside the range.
What the price implies To be worth today’s price, PAYX’s free cash flow would need to grow about 7% a year for five years; our estimate uses 9%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much PAYX 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 2.4× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- -0.08
- Volatility
- 31% vs 13% SPY
- Correlation SPY
- −0.03
- Correlation QQQ
- −0.19
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 $126.56, 13% above the price.
ProfitabilityReturn on equity of 47% over the last 12 months.
ValuationP/E of 22.1× is 17% below its own average of 26.7× at the last 3 fiscal year-ends.
ProfitabilityOperating margin of 39% over the last 12 months.
QualityPasses all four of our quality checks: cash generation, returns on capital, growth and balance sheet.
Top bearish points 5 of 5
Balance sheetDebt rose 457% to $4.6B from FY2024 to FY2026.
ProfitabilityOperating margin narrowed to 38.6% in FY2026 from 41.2% in FY2024 (SEC filings).
Balance sheetDebt / equity of 1.2×, above the 0.5× median for the 116 Industrials companies we cover.
Cash returnsDividends take 90% of earnings ($1.6B paid over 12 months), leaving little to reinvest or raise the payout.
ValuationTrades 5.4% above its Market Value of $106.34, the average price paid since the Sep 23 filing.
Who’s talking about it
Notable investors, executives, analysts and public figures on Paychex in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Industrials
All fundamentals
P/E 22.1 · FCF yield 5.0% · ROE 47%
Valuation
- P/E
- 22.1×3-yr-end avg 26.7× · Industrials median 27.5×
- Price / FCF
- 19.8×
- FCF yield
- 5.0%
- EV / EBITDA
- 14.4×
- Price / sales
- 6.06×
- Price / book
- 10.79×
- Market cap
- $40.0Bprice × diluted shares
- Enterprise value
- $43.6B
Growth
- Revenue, 12 months
- $6.6B
- Sales growth, 12 months
- +14.0%vs the 12 months before
- Sales growth, 3 yrs
- +9.2%/yrfrom FY2023
- Diluted EPS, 12 months
- $5.04
- EPS growth, last FY
- +6.8%
- Net income, 12 months
- $1.8B
- Net income growth
- +12%12 months vs before
Profitability
- Gross margin
- 74.4%
- Operating margin
- 39.2%
- Net margin
- 27.4%
- FCF margin
- 30.5%
- Return on equity
- 47%
- Return on invested capital
- 27%
Balance sheet
- Cash & short-term inv.
- $934M
- Total debt
- $4.6B
- Net cash
- −$3.6B
- Debt / equity
- 1.23×
- Interest coverage
- 9.7×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $2.0B
- FCF growth, 12 months
- +8%
- Dividend yield
- 4.06%$1.6B paid
- Payout ratio
- 90%
- Buybacks, 12 months
- $451M1.1% of market cap
- Share count, 1 year
- −1.5%diluted shares vs a year ago
- Stock-based comp
- $89M
Trailing 12 months to Aug 31, 2026; balance sheet at Aug 31, 2026. From Paychex’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.
Valuation details
DCF $126.56 · MV $106.34 · FCF value $145.55
Assumes 9.2% growth for 5 years (revenue grew 9.2% a year FY23–FY26), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $5.66 a share (trailing 12 months to Aug 31, 2026), from the 10-Q filed Sep 24, 2026. Net debt $3.6B, not deducted.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only arm once a company is in a dip.
Momentum & 52-week range
RSI 53 · 5 days −5.0%
The business
FCF $2.0B · Sales +6%
- Free cash flow, 12 months$2.0B
- Free-cash-flow yield5.2%
- Free-cash-flow margin30%
- Gross margin74%
- Operating margin39%
- Return on invested capital25%
- Return on equity47%
- Sales growth (latest quarter vs year-ago quarter)+6%
- Net debt / EBITDA1.3×
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.
Get a text when PAYX fires a reversal signal
One text when a published rule fires on PAYX or any of the 333 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.