Paycom Software, Inc. — Software - Application. Scored on the same transparent 7-signal model behind the daily rankings.
★
PAYC
Paycom Software, Inc. · Software - Application
FCF$446mC
Rev+8.9%B
D/E0.94C+
P/E16.0xA-
PEG1.01B+
83.5Score
$139.56$6.5B
1Y Target$151.13Analyst consensus · 16 analysts
5Y Target$221.26Compound horizon
10Y Target$328.23Long-dated conviction
FCF$446mTTMC
FCF $446m — modest; watch for margin expansion
Rev+8.9%TTM YoYB
Revenue +8.9% — at or above S&P median
D/E0.94C+
D/E 0.94 — above the Technology debt median (≈75th pctile)
P/E16.0xA-
P/E 16.0 — cheaper than most Technology peers (≈25th pctile)
PEG1.01B+
PEG 1.01 — near fair value, classic Lynch benchmark (1.0)
Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.
Quality-growth score · 83.5
Quality0.86
Growth0.86
Value0.79
Why this score
Buying back stock
Durable high returns
Entry · Margin of safety
52-week rangeNear 52-week low
44% off the 12-month high
vs DCF fair value32% belowest. fair value ~$207
Quality signals · context only
Gross profitability36% · B+gross profit ÷ total assets (Novy-Marx)
ROIC31.5% · Areturn on invested capital — not score-weighted
Why now
Paycom’s end‑to‑end HCM platform—combining payroll, talent acquisition, and expense management—creates a sticky subscription base that compounds revenue as mid‑market firms expand their workforce. The business is delivering 8.9% YoY revenue growth while preserving a 22.4% profit margin and generating a staggering 57.9% ROE, proving the model scales profitably. The thesis hinges on the continued migration of U.S. SMBs to a unified cloud HCM suite, which fuels recurring cash flow and justifies a higher multiple.
Moat
The integrated payroll‑to‑talent suite locks customers into a single data ecosystem, making migration costly and time‑consuming; this switching barrier is amplified by Paycom’s proprietary analytics and real‑time processing. The 57.9% ROE stems from pricing power in a niche where Paycom can command premium SaaS fees thanks to its deep workflow automation, a lever competitors cannot replicate quickly without massive re‑engineering.
Risk
Revenue growth has slowed to a modest 8.9% YoY, raising concerns that the mid‑market TAM may be saturating and that larger rivals could win share, while a debt‑to‑equity of 0.94 signals rising leverage that could crimp cash flow if margin pressure intensifies. A breach of the 52‑week low or a widening of the analyst target range would confirm the bear case and force a price correction.
Horizon
1-3 yr $151.13 (16-analyst consensus) — fundamentals + valuation re-rating. 5 yr $221.26 at ~10% CAGR — compounding case rests on the competitive position widening. 10 yr $328.23 if current growth sustains into durable earnings power.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.
Position sizing · PAYC
$
%
%
Shares to buy
14
Position size
$1,954
3.9% of portfolio
Stop price
$104.67
25% below $139.56
$ at risk if stopped
$488.46
budget $500.00 · 1% of portfolio
Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.
Paycom Software, Inc. (PAYC): score, valuation & FAQ
Paycom Software, Inc. (PAYC) is a Software - Application company that scores 83.5 out of 100 on the Bull Rankings quality-growth model — a strong reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.
Its strongest graded signals are P/E (A-) and PEG (B+). On valuation, PAYC sits about 32% below our discounted-cash-flow fair value (a margin of safety).
Is PAYC a good stock to buy?
Bull Rankings scores PAYC 83.5 out of 100 on its quality-growth model, which is a strong reading. That is driven by P/E (A-) and PEG (B+). A score is a quantitative screen of Paycom Software, Inc.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.
Why does PAYC score 83.5 on Bull Rankings?
The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). PAYC earns its highest marks on P/E (A-) and PEG (B+). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.
Is PAYC overvalued or undervalued?
Based on $139.56, PAYC sits about 32% below our discounted-cash-flow fair value (a margin of safety). It trades at a 16.0x× P/E (graded A-). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.
What are the main risks of investing in PAYC?
Revenue growth has slowed to a modest 8.9% YoY, raising concerns that the mid‑market TAM may be saturating and that larger rivals could win share, while a debt‑to‑equity of 0.94 signals rising leverage that could crimp cash flow if margin pressure intensifies. A breach of the 52‑week low or a widening of the analyst target range would confirm the bear case and force a price correction.
Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial adviser.