📊 PAYC Key Takeaways
Is Paycom Software, Inc. (PAYC) a Good Investment?
Paycom demonstrates exceptional profitability and cash generation with a 27.2% net margin and $182.6M in free cash flow (31.9% FCF margin), supported by industry-leading 84.7% gross margins typical of quality SaaS businesses. However, the company exhibits concerning maturity signals with decelerating revenue growth (8.9% YoY), flat net income growth despite revenue expansion, and a thin 1.08x current ratio that warrants monitoring against its $675M debt burden.
Paycom Software, Inc. Key Strengths (PAYC)
- Exceptional profitability: 27.2% net margin and 36.8% operating margin demonstrate pricing power and operational excellence
- Robust free cash flow generation: $182.6M FCF (31.9% FCF margin) with low capex intensity (5.5% of revenue) provides financial flexibility
- Fortress balance sheet: 52.5x interest coverage ratio indicates negligible financial distress risk despite leverage
- Superior gross margins of 84.7% reflect strong product differentiation and competitive moat in payroll software
- Solid return on equity of 19.2% demonstrates effective capital deployment
PAYC Stock Risks: Paycom Software, Inc. Investment Risks
- Decelerating growth at 8.9% YoY for enterprise software raises maturity concerns and competitive pressure questions
- Profitability stalled: flat net income YoY despite revenue growth suggests margin compression or operational headwinds
- Tight liquidity: 1.08x current ratio limits financial flexibility for opportunities or unexpected challenges
- Material net debt position: $675M long-term debt exceeds cash of $153.9M and requires ongoing FCF deployment
- Share dilution: 9.4% EPS decline on flat net income indicates equity issuance pressure on per-share metrics
Key Metrics to Watch
- Quarterly revenue growth rate trend - critical to confirm if 8.9% represents sustainable baseline or continued deceleration
- Net income and operating margin expansion - need evidence of operating leverage return or growth acceleration
- Free cash flow consistency - monitor conversion rate sustainability above 30% FCF margin
- Current ratio and working capital management - validate liquidity improvement with strong cash generation
Paycom Software, Inc. (PAYC) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 31.9% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
PAYC Profit Margin, ROE & Profitability Analysis
PAYC vs Technology Sector: How Paycom Software, Inc. Compares
How Paycom Software, Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Paycom Software, Inc. Stock Overvalued? PAYC Valuation Analysis 2026
Based on fundamental analysis, Paycom Software, Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Paycom Software, Inc. Balance Sheet: PAYC Debt, Cash & Liquidity
PAYC Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Paycom Software, Inc.'s revenue has grown significantly by 94% over the 5-year period, indicating strong business expansion. The most recent EPS of $5.88 reflects profitable operations.
PAYC Revenue Growth, EPS Growth & YoY Performance
PAYC Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $530.5M | $139.4M | $2.48 |
| Q3 2025 | $451.9M | $73.3M | $1.31 |
| Q2 2025 | $437.5M | $68.0M | $1.20 |
| Q1 2025 | $499.9M | $139.4M | $2.48 |
| Q3 2024 | $406.3M | $64.5M | $1.30 |
| Q2 2024 | $401.1M | $64.5M | $1.11 |
| Q1 2024 | $451.6M | $119.3M | $2.06 |
| Q3 2023 | $334.2M | $52.2M | $0.90 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Paycom Software, Inc. Dividends, Buybacks & Capital Allocation
PAYC SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Paycom Software, Inc. (CIK: 0001590955)
📋 Recent SEC Filings
❓ Frequently Asked Questions about PAYC
What is the AI rating for PAYC?
Paycom Software, Inc. (PAYC) has an AI grade of A with 76% confidence, based on fundamental analysis of SEC EDGAR filings.
What are PAYC's key strengths?
Claude: Exceptional profitability: 27.2% net margin and 36.8% operating margin demonstrate pricing power and operational excellence. Robust free cash flow generation: $182.6M FCF (31.9% FCF margin) with low capex intensity (5.5% of revenue) provides financial flexibility.
What are the risks of investing in PAYC?
Claude: Decelerating growth at 8.9% YoY for enterprise software raises maturity concerns and competitive pressure questions. Profitability stalled: flat net income YoY despite revenue growth suggests margin compression or operational headwinds.
What is PAYC's revenue and growth?
Paycom Software, Inc. reported revenue of $571.9M.
Does PAYC pay dividends?
Paycom Software, Inc. pays dividends, with $17.7M distributed to shareholders in the trailing twelve months.
Where can I find PAYC SEC filings?
Official SEC filings for Paycom Software, Inc. (CIK: 0001590955) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is PAYC's EPS?
Paycom Software, Inc. has a diluted EPS of $3.04.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is PAYC's fundamental grade?
Based on our AI fundamental analysis in May 2026, Paycom Software, Inc. has a A grade with 76% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is PAYC stock overvalued or undervalued?
Valuation metrics for PAYC: ROE of 19.2% (sector avg: 22%), net margin of 27.2% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is PAYC's AI grade for 2026?
Our dual AI analysis gives Paycom Software, Inc. a combined A grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is PAYC's free cash flow?
Paycom Software, Inc.'s operating cash flow is $213.8M, with capital expenditures of $31.2M. FCF margin is 31.9%.
How does PAYC compare to other Technology stocks?
Vs Technology sector averages: Net margin 27.2% (avg: 18%), ROE 19.2% (avg: 22%), current ratio 1.08 (avg: 2.5).