PAYC Stock Analysis — Paycom Software
Sector: Cloud Software
AI Verdict
Paycom trades at 13.8x next year's earnings with 68.1% expected EPS growth, which is cheap for the growth on offer if its sticky platform keeps customers locked in, but the overbought RSI means short-term downside risk is high.
Competitive Moat
Paycom runs a unified cloud platform for payroll and HR management, locking in customers with high switching costs due to deep integration with business workflows and compliance requirements. Its defensibility comes from the pain of migrating sensitive HR data and retraining staff on new systems, not just software features.
Summary
Paycom's forward P/E of 13.8x and forecasted 68.1% EPS growth make it a rare growth stock trading at a value multiple.
Where It Stands
The stock is up just 0.44% over 12 months, trades at 13.8x next year's earnings (well below the software sector median of 35x), and its RSI of 80.5 signals it is extremely overbought.
Key Metrics
- RSI: 80.5 — Overbought
- Trailing P/E: 23.2x
- Forward P/E: 13.8x
- PEG Ratio: 0.33
- Earnings Growth: +0.7%
- Revenue Growth: +0.1%
- Market Cap: $9.8B
- Dividend Yield: 0.01%
- 1-Year Return: 0.44%
- 52-Week High: $234.60
- 52-Week Low: $104.90
Analyst Consensus
12 Buy · 15 Hold · 0 Sell (27 analysts)
Bull Case
With analysts forecasting 68.1% EPS growth and the stock trading at only 13.8x forward earnings, you're getting high growth at a price usually reserved for slow-growth sectors.
Bear Case
If the RSI of 80.5 unwinds to a neutral 60, a typical pullback could erase 15–25% of recent gains regardless of fundamentals.
Catalyst to Watch
Watch the next earnings call for updates on client retention and module adoption rates, as any sign of customer churn would challenge the moat story.