Paycom (PAYC) AI Stock Analysis

Paycom

(BMV:PAYC)

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Positive Factors

Recurring SaaS modelPaycom’s cloud-based subscription model creates recurring revenue as employers continue running payroll and HR processes on the platform. Revenue can expand through larger workforces and broader module adoption, supporting durable customer relationships and visibility.

Negative Factors

Revenue growth slowdownThe sharp deceleration in revenue growth raises concern that Paycom’s mature customer base and current sales execution may be limiting expansion. Slower growth can reduce operating leverage, constrain reinvestment capacity, and make future earnings growth more dependent on efficiency.

Paycom (PAYC) vs. SPDR S&P 500 ETF (SPY)

Market Cap: MXN 11.91B
Dividend Yield: 0.51%
Average Volume (3M): 25
Price to Earnings (P/E): 28.0
Beta (1Y): -0.32
Revenue Growth: -0.81%
EPS Growth: 14.47%
Country: Mexico
Employees: 5,770
Sector: Technology
Sector Strength: 61
Industry: Software - Application

Paycom Business Overview & Revenue Model

Company Description

Paycom Software, Inc., established in 1998 and headquartered in Oklahoma City, Oklahoma, provides a comprehensive, cloud-based human capital management (HCM) platform. This software-as-a-service (SaaS) solution is specifically tailored for small to m...

Paycom Earnings Call Summary

Earnings Call Date:Aug 04, 2026(Q2-2026)|% Change Since:67.73%|Next Earnings Date:Nov 03, 2026

Earnings Call SentimentPositive

The call conveyed strong operational and financial momentum: double-digit top-line growth in the quarter, robust margin expansion (320 bps YoY to 44.2%), raised full-year adjusted EBITDA guidance (record margin at midpoint), and substantial free cash flow and shareholder returns (~$1.4B repurchased YTD). Product and AI initiatives (Project Arc, IWant, Asset Management, Career & Succession) signal durable product-led growth and longer-term TAM expansion. Primary risks noted were a moderation in full-year revenue growth relative to Q2, increased use of the revolving credit facility to fund buybacks (cash down to $198M), short-term limited contribution from very recent product launches, and sensitivity to interest rate assumptions. Overall, positives around profitability, cash generation, product innovation, and capital returns materially outweighed the identified headwinds.

Positive Updates

Revenue Growth

Total revenue of $531 million in Q2 2026, up 10% year-over-year; recurring and other revenue of $505 million, up 11% year-over-year.

Negative Updates

Deceleration Implied in Full-Year Guidance

Raised full-year revenue guidance to $2.197B–$2.212B (7%–8% growth), which implies a deceleration versus the Q2 10% year-over-year growth rate and suggests more moderate revenue pacing in H2 2026.

Company Guidance

Paycom raised its 2026 outlook, now expecting total revenues of $2.197–2.212 billion (up 7%–8% year‑over‑year) with recurring and other revenue up 8%–9%; the outlook includes roughly $105 million of interest on funds held for clients (assuming current rates). Full‑year adjusted EBITDA is guided to $1.007–1.022 billion, implying a record adjusted EBITDA margin of about 46% at the midpoint, and management expects free cash flow to exceed $650 million. Additional modeling assumptions and capital allocation metrics disclosed: CapEx around 6% of revenue, GAAP tax rate ~29%, non‑GAAP tax rate ~27%, stock‑based comp ~3% of revenue; the company ended Q2 with ~44 million shares outstanding, repurchased ~2.6 million shares in Q2 (≈6% of shares) for $346 million and nearly 11 million shares year‑to‑date returning ~$1.4 billion, has $1.66 billion remaining on its buyback authorization, paid ~$18 million of dividends in Q2 and the Board approved a $0.375 per‑share quarterly dividend.

Paycom Risk Analysis

Paycom disclosed 35 risk factors in its most recent earnings report. Paycom reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

0 New Risks

Paycom Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

MX:PAYC against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
APPF	83Outperform	$7.56B	44.71	32.03%	―	19.96%	-15.24%
PCTY	75Outperform	$8.92B	34.25	23.44%	―	11.04%	22.52%
TTAN	75Outperform	$8.13B	-61.50	-8.33%	―	22.90%	61.40%
ASUR	67Neutral	$283.90M	-79.14	-1.85%	―	20.59%	79.90%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
EVCM	50Neutral	$1.62B	49.35	4.74%	―	-6.77%	―

* Technology Sector Average

Performance Comparison

MX:PAYC and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
MX:PAYC	Paycom Software	5040.00	1589.43	46.06%
ASUR	Asure Software Inc	9.41	0.95	11.23%
PCTY	Paylocity Holding	170.91	30.10	21.38%
APPF	AppFolio Inc.	213.25	-49.01	-18.69%
EVCM	Evercommerce, Inc.	9.16	-2.26	-19.79%
TTAN	ServiceTitan, Inc. Class A	84.26	-10.52	-11.10%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Paycom AI Stock Analysis