Paycom Software (NYSE: PAYC) received a significant boost in its stock rating, as analysts at BTIG Research upgraded the company to a “strong-buy” rating in a report released on Tuesday. This upgrade reflects growing confidence in the company’s performance within the cloud-based human capital management sector.
In addition to BTIG’s positive outlook, several other analysts have recently weighed in on Paycom Software’s stock. Mizuho lowered its price target from $220.00 to $180.00, designating a “neutral” rating. Meanwhile, UBS Group adjusted its price objective from $285.00 to $245.00 while maintaining a “buy” rating. Analysts from JPMorgan Chase & Co. and KeyCorp also revised their targets, with JPMorgan reducing its price from $235.00 to $220.00 and KeyCorp lowering its target from $290.00 to $250.00, both retaining “neutral” and “overweight” ratings, respectively.
Overall, the analysis indicates a mix of sentiments, with one analyst rating the stock as a “strong buy,” four designating it as a “buy,” and twelve analysts giving a “hold” rating. According to data from MarketBeat, the consensus rating for Paycom Software stands at “hold,” with an average price target of $223.57.
Quarterly Earnings and Financial Performance
Paycom Software recently released its quarterly earnings report on November 5, 2023. The company reported earnings per share (EPS) of $1.94, which fell short of analysts’ expectations of $1.96 by $0.02. Revenue for the quarter totaled $493.30 million, slightly surpassing the consensus estimate of $492.62 million.
The company’s net margin stood at 22.65%, with a return on equity of 24.79%. Notably, revenue increased by 9.2% compared to the same quarter last year, where the firm posted an EPS of $1.67. Analysts project that Paycom Software will achieve an EPS of $7.15 for the current fiscal year.
Insider Transactions and Institutional Investments
In other developments, Chief Financial Officer Robert D. Foster sold 1,300 shares on December 10, 2023, at an average price of $162.66, amounting to a total transaction value of $211,458.00. Following this sale, Foster retains 14,747 shares in the company, valued at approximately $2,398,747.02, reflecting an 8.10% decrease in ownership. This transaction has been disclosed in a filing with the Securities and Exchange Commission, accessible on their website.
Institutional investors and hedge funds have also adjusted their stakes in Paycom Software. Brooklyn Investment Group increased its holdings by 19.4% during the first quarter, acquiring an additional 39 shares to reach a total of 240 shares. UMB Bank n.a. raised its stake by 7.6% in the third quarter, now owning 789 shares. Other notable investors include Applied Finance Capital Management LLC and ORG Wealth Partners LLC, both of which have also increased their holdings recently.
Hedge funds and institutional investors collectively own 87.77% of Paycom Software’s stock, highlighting strong institutional confidence in the company.
Founded in 1998, Paycom Software, Inc. delivers a cloud-based human capital management solution tailored for small to mid-sized companies in the United States. The software offers critical functionality and data analytics necessary for managing the employment life cycle from recruitment to retirement.
