Zacks Investment Research Upgrades Paycom Software (NYSE:PAYC) to Buy

Zacks Investment Research upgraded shares of Paycom Software (NYSE:PAYC) from a hold rating to a buy rating in a research report sent to investors on Wednesday morning, Zacks.com reports. Zacks Investment Research currently has $259.00 price objective on the software maker’s stock.

According to Zacks, “Paycom reported strong Q2 results wherein both earnings and revenues increased year over year and surpassed estimates as well. The company is gaining from solid growth in recurring revenues, backed by new business wins and an increased existing clientele. A strong spurt in sales can be attributed to its employee usage strategy, sales efforts and investments. The launch of differentiated product offering, Direct Data Exchange, for all Paycom Software clients in the first quarter is also boosting client additions. The release of Ask Here also makes us optimistic. However, stiff competition from companies like ADP is a lingering headwind, which could induce pricing pressure and shrink Paycom’s margins. Further, the company’s full-year guidance implies a deceleration in revenue growth, which makes us anxious about the stock's prospects.”

PAYC has been the subject of a number of other reports. KeyCorp raised their target price on Paycom Software from $246.00 to $275.00 and gave the stock an overweight rating in a research note on Wednesday, July 31st. Cantor Fitzgerald started coverage on Paycom Software in a research note on Tuesday, June 18th. They issued a neutral rating for the company. Northland Securities raised their target price on Paycom Software from $215.00 to $275.00 and gave the stock an outperform rating in a research note on Tuesday, July 9th. Barclays raised their target price on Paycom Software from $175.00 to $185.00 and gave the stock an equal weight rating in a research note on Wednesday, May 1st. Finally, Jefferies Financial Group downgraded Paycom Software from a buy rating to a hold rating and set a $233.00 price objective for the company. in a research report on Friday, July 19th. Nine equities research analysts have rated the stock with a hold rating and seven have issued a buy rating to the company’s stock. The company has an average rating of Hold and an average price target of $226.79.

Shares of PAYC opened at $248.91 on Wednesday. Paycom Software has a 52-week low of $107.46 and a 52-week high of $256.84. The company has a market capitalization of $14.52 billion, a PE ratio of 99.44, a price-to-earnings-growth ratio of 3.36 and a beta of 1.59. The stock has a fifty day simple moving average of $238.70 and a two-hundred day simple moving average of $207.27. The company has a quick ratio of 1.07, a current ratio of 1.07 and a debt-to-equity ratio of 0.07.

Paycom Software (NYSE:PAYC) last issued its earnings results on Tuesday, July 30th. The software maker reported $0.75 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.61 by $0.14. Paycom Software had a return on equity of 38.25% and a net margin of 23.93%. The business had revenue of $169.30 million during the quarter, compared to the consensus estimate of $163.88 million. During the same period last year, the company earned $0.59 EPS. The company’s revenue for the quarter was up 31.4% on a year-over-year basis. As a group, equities analysts anticipate that Paycom Software will post 2.74 earnings per share for the current fiscal year.

In related news, insider Jeffrey D. York sold 25,000 shares of the firm’s stock in a transaction dated Wednesday, August 14th. The stock was sold at an average price of $232.84, for a total transaction of $5,821,000.00. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, COO Jon Evans sold 2,100 shares of the firm’s stock in a transaction dated Tuesday, July 9th. The shares were sold at an average price of $240.47, for a total value of $504,987.00. The disclosure for this sale can be found here. Insiders have sold a total of 29,700 shares of company stock valued at $6,848,457 over the last three months. Corporate insiders own 16.09% of the company’s stock.

A number of institutional investors have recently made changes to their positions in the stock. Geode Capital Management LLC boosted its stake in Paycom Software by 5.2% in the fourth quarter. Geode Capital Management LLC now owns 505,767 shares of the software maker’s stock valued at $61,930,000 after acquiring an additional 24,903 shares during the last quarter. Pennsylvania Trust Co purchased a new position in Paycom Software in the first quarter valued at about $1,600,000. Oakbrook Investments LLC purchased a new position in Paycom Software in the first quarter valued at about $255,000. CWM LLC purchased a new position in Paycom Software in the first quarter valued at about $45,000. Finally, Mercer Global Advisors Inc. ADV purchased a new position in Paycom Software in the first quarter valued at about $664,000. Institutional investors own 74.89% of the company’s stock.

Paycom Software Company Profile

Paycom Software, Inc provides cloud-based human capital management (HCM) software service for small to mid-sized companies in the United States. It provides functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution offers a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, labor management reports/push reporting, and geofencing/geotracking.

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