PAYC Stock Analysis — Paycom Software
Sector: Cloud Software
AI Verdict
Paycom trades at 12.2x next year's earnings with 30% EPS growth expected, which is cheap for the growth you're getting if customer retention holds, but the lack of a proprietary AI edge makes the growth story more fragile than some software peers.
Competitive Moat
Paycom provides cloud-based human capital management (HCM) software, locking in customers with high switching costs due to complex payroll integrations and regulatory compliance needs. Its defensibility comes from sticky client relationships and proprietary payroll automation, though it lacks the scale or proprietary AI models of larger peers.
Summary
Paycom trades at just 12.2x forward earnings despite analyst expectations for 30% EPS growth next year.
Where It Stands
Shares are down -43.49% over the past year, the RSI is elevated at 69.2 (pullback risk), and the forward P/E of 12.2x is far below the software sector median of 35x.
Key Metrics
- RSI: 69.2 — Near Overbought
- Trailing P/E: 15.8x
- Forward P/E: 12.2x
- PEG Ratio: 0.52
- Earnings Growth: +0.3%
- Revenue Growth: +0.1%
- Market Cap: $6.1B
- Dividend Yield: 0.01%
- 1-Year Return: -43.49%
- 52-Week High: $267.76
- 52-Week Low: $104.90
Analyst Consensus
12 Buy · 16 Hold · 0 Sell (28 analysts)
Bull Case
The combination of a 12.2x forward P/E and 30.0% expected EPS growth means you're getting high growth at a price more typical of mature companies.
Bear Case
With an RSI of 69.2, the stock is at elevated risk of a technical pullback, and a return to the sector median P/E of 35x is unlikely without a narrative shift after a -43.49% year.
Catalyst to Watch
Watch for quarterly earnings updates—if Paycom can sustain double-digit EPS growth, the valuation gap to peers could narrow.