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Assessing Paycom (PAYC) Valuation As Growth Slows To 9% And Buybacks Support Earnings

Simply Wall St · 4d ago

Paycom Software (PAYC) is back in focus after management outlined slower yet high single digit revenue growth, guiding to about 9% for 2025, alongside expanding profitability metrics and sizeable ongoing share repurchases.

See our latest analysis for Paycom Software.

At a share price of $156.55, Paycom’s recent 1 day share price return of 2.32% comes after a weaker patch, with a 90 day share price return of 23.66% decline and a 1 year total shareholder return of 21.98% loss suggesting momentum has been fading even as management talks up profitability and buybacks.

If Paycom’s shift to steadier growth has you rethinking your watchlist, this could be a good moment to widen your search with other high growth tech and AI stocks.

With revenue growth now guided at about 9% for 2025 and the share price well below past highs, is Paycom quietly offering value, or is the market already correctly pricing in its steadier growth path?

Most Popular Narrative: 25% Undervalued

With Paycom’s fair value in the most followed narrative set at about $208.71 versus a last close of $156.55, the story leans toward undervaluation driven by steady growth and margin assumptions.

Strategic reinvestment of expanding gross and EBITDA margins into R&D, AI infrastructure, and targeted marketing is enabling Paycom to keep pace with accelerated digital adoption trends across the HCM industry, supporting future operating leverage and margin expansion.

Read the complete narrative.

Curious what kind of revenue climb and profit margin profile need to line up for that fair value? The narrative leans on specific earnings, margin expansion, and a future P/E that sits above sector norms. The full set of assumptions ties these together into one pricing roadmap.

Result: Fair Value of $208.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside story can be knocked off course if AI tools like IWant become commoditized or if higher AI and infrastructure spending keeps margins under pressure.

Find out about the key risks to this Paycom Software narrative.

Build Your Own Paycom Software Narrative

If that story does not quite fit how you see Paycom, you can review the numbers yourself and form a perspective that reflects your own view, Do it your way.

A great starting point for your Paycom Software research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Paycom is already on your radar, do not stop there. You are missing real opportunities if you are not checking what else the data is surfacing right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.