Here's What to Expect from Paycom Software's Next Earnings Report
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Oklahoma City-based Paycom Software, Inc. (PAYC) provides cloud-based human capital management (HCM) SaaS solutions for integrated software for employee records and talent management processes. Valued at $11.6 billion by market cap, Paycom serves over 36,000 clients with employees in the U.S., Canada, Mexico, the U.K. and Ireland.
The software major is expected to announce its fourth-quarter earnings on Wednesday, Feb. 5. Ahead of the event, analysts expect Paycom to report a non-GAAP profit of $1.62 per share, up 13.3% from $1.43 per share reported in the year-ago quarter. Furthermore, the company has surpassed or matched Wall Street’s bottom-line projections in each of the past four quarters. Its adjusted EPS for the last reported quarter declined marginally to $1.31 but exceeded analysts’ estimates by 9.2%.
For the full fiscal 2024, analysts expect Paycom to report an adjusted EPS of $6.88, up 16.6% from $5.90 in fiscal 2023. While in fiscal 2025, its earnings are expected to grow 4.1% year-over-year to $7.16 per share.
PAYC stock has gained 1.6% over the past 52 weeks, substantially underperforming the Technology Select Sector SPDR Fund’s (XLK) 18.2% gains and the S&P 500 Index’s ($SPX) 22% surge during the same time frame.
Paycom Software’s stock prices skyrocketed 21.4% in the trading session after the release of its better-than-expected Q3 results on Oct. 30. Driven by the surge in its recurring revenues, Paycom’s overall total revenues increased 11.2% year-over-year to $451.9 million, exceeding Wall Street’s topline estimates. Meanwhile, the company also showcased impressive expense management by cutting down on its general and admin expenses. And despite a 21.6% increase in research and development spending to over $63 million, Paycom’s operating income grew 8.2% year-over-year to $104.9 million.
However, analysts remain cautious about Paycom's prospects. The stock has a consensus “Hold” rating overall. Of the 18 analysts covering the stock, two advise “Strong Buy” and 16 recommend a “Hold” rating. Its mean price target of $219.38 represents a 9.3% premium to current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.