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Should You Investigate Paychex, Inc. (NASDAQ:PAYX) At US$111?

Simply Wall St · 4d ago

Let's talk about the popular Paychex, Inc. (NASDAQ:PAYX). The company's shares received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$129 at one point, and dropping to the lows of US$108. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Paychex's current trading price of US$111 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Paychex’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What's The Opportunity In Paychex?

Good news, investors! Paychex is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $169.72, but it is currently trading at US$111 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Paychex’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

See our latest analysis for Paychex

Can we expect growth from Paychex?

earnings-and-revenue-growth
NasdaqGS:PAYX Earnings and Revenue Growth January 7th 2026

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Paychex's earnings over the next few years are expected to increase by 47%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since PAYX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on PAYX for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PAYX. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you want to dive deeper into Paychex, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Paychex has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Paychex, you can use our free platform to see our list of over 50 other stocks with a high growth potential.