Paycom Software (PAYC) closed the most recent trading day at $154.98, moving +0.2% from the previous trading session. This change lagged the S&P 500’s 0.28% gain on the day. Elsewhere, the Dow gained 0.21%, while the tech-heavy Nasdaq added 0.65%.
Coming into today, shares of the maker of human-resources and payroll software had gained 0.55% in the past month. In that same time, the Computer and Technology sector gained 0.29%, while the S&P 500 gained 0.86%.
Wall Street will be looking for positivity from PAYC as it approaches its next earnings report date. This is expected to be October 30, 2018. The company is expected to report EPS of $0.52, up 79.31% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $130.48 million, up 28.82% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.64 per share and revenue of $555.49 million, which would represent changes of +103.08% and +28.27%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for PAYC. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.33% higher. PAYC currently has a Zacks Rank of #1 (Strong Buy).
Digging into valuation, PAYC currently has a Forward P/E ratio of 58.7. This valuation marks a discount compared to its industry’s average Forward P/E of 70.68.
Also, we should mention that PAYC has a PEG ratio of 2.3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. PAYC’s industry had an average PEG ratio of 4.1 as of yesterday’s close.
The Internet – Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 92, which puts it in the top 36% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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