DA Davidson upgrades Paycom to Buy on limited downside risks, valuation

DA Davidson upgraded Paycom (PAYC) to Buy from Neutral with an unchanged $350 price target as part of a broader research note on payroll providers. Growth is slowing for Paylocity (PCTY) and Paycom, and upside to guidance will likely be more muted than in the recent past, but the downside risk to estimates outside of a severe recession is limited, the analyst tells investors in a research note. DA Davidson adds that both companies continue to execute well, and valuations on their stock are "much more inviting" than they were last year.