Stock · PAYX · Technology

Paychex Inc

United States · Large Cap · listed since 1990 · Revenue 12 mo. $6.6B

Price as of 11/06/2026

StockScorer score
8.2
of 10 9 of 11 points High Match To the score
Price
$117.06
1 Y −5.8%
Market cap
$40.5B
Phase
Payout
core business profitable, at least half of operating cash flow goes to shareholders
Revenue +9.2% a year (3 years)EBIT margin 38.6%Payout 101.4% of operating cash flow

Paychex, Inc., together with its subsidiaries, provides human capital management solutions (HCM) for human resources, payroll processing, employee benefits, and insurance services for small to medium-sized businesses in the United States, Europe, Canada, India, and Israel.

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Paychex, Inc., together with its subsidiaries, provides human capital management solutions (HCM) for human resources, payroll processing, employee benefits, and insurance services for small to medium-sized businesses in the United States, Europe, Canada, India, and Israel. It offers technology and advisory solutions; and payroll tax administration services. The company also provides retirement solutions, such as plan implementation, ongoing compliance with government regulations, employee and employer reporting, participant and employer online access, electronic funds transfer, and other administrative services; HCM solutions from recruiting and hiring to retirement; and talent management and talent acquisition services. In addition, it offers payroll solutions, including calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients' payroll obligations. Further, the company provides workforce management solutions; benefits administration solutions; digital marketplace for earned wages, financial wellness solutions, and voluntary lifestyle benefits; administrative services organization HR outsourcing solutions; solutions to payroll and non-payroll customers; retirement and funding solutions; and insurance services for property and casualty coverage, such as workers' compensation, business-owner policies, cyber security protection, and commercial auto, as well as health and benefits coverage, including health, dental, vision, and life. Additionally, it offers payroll, HR, employee benefits administration, retirement, insurance, risk management outsourcing, and access to professionally trained HR representatives, virtually and on-site. It markets and sells its solutions primarily through its direct sales force. Paychex, Inc. was founded in 1971 and is headquartered in Rochester, New York.

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Summary

Paychex Inc is around the middle of the Technology sector overall

58.5 of 100

Mean of the six area values. Each area value is the mean of the stock's ranks among the companies in its sector. 50 is the middle of the sector, not a share of companies beaten.

Analysis

What the price requires

The price requires 6.3% FCF growth a year, less than achieved over the last 5 and 10 years.

If free cash flow stays at €2.1B (2026), it supports €23.2B. The remaining €13.2B of the market value assume it grows 6.3% a year for 10 years and not at all afterwards.

Required FCF growth per year

6.3%

no growth afterwards

Market value breakdown€36.3B market value, price as of 11/06/2026

€23.2B without growth
€13.2B priced-in growth
  • 5 yrs achieved 12.6%
  • 10 yrs achieved 9.1%
  • priced in 6.3%

Valuation against its own history

Price to operating cash flow 18.5×, below its usual range.

Middle half of 20 quarters: 21.1× to 27.5×, median 24.2×.

Measures only against its own past, not against what the company is worth. Price as of 11/06/2026.

5 signs support the expectation, none speaks against it.

What supports it

with respect to the priced-in expectation

  • Expectation below the company's own record priced in 6.3%, achieved at least 9.1%
  • High, stable gross margin median 70.7%, range 6.0 pp (10 years)
  • High return on capital every year ROCE at least 23.0% (10 years)
2 more
  • Low capital needs capex median 3.1% of revenue (10 years)
  • Steady FCF margin at least 27.5%, range 8.2 pp (10 years)

What speaks against it

with respect to the priced-in expectation

No anomaly in the stored figures.

Since the last quarter

Q2 → Q3 2026

Mostly worse than the previous quarter: 3 of 3 changes for the worse.

  • FCF, 12 mo.$2.3B → $2.0B−13.1%worse
  • FCF margin35.7% → 30.5%−5.1 ppworse
  • Net debt$3.5B → $4.0B+15.2%worse

5 more unchanged: Revenue, 12 mo., Gross margin, EBIT margin, Shares outstanding, Return on equity

Derivation

How the sector comparison is derived

Each area value is the average of its metrics' ranks within the sector (0 to 100, 50 is the middle). For metrics where lower is better, the rank is mirrored. The overall value is the average of the area values.

Price as of 11/06/2026.

Profitability86.8above the middleEarns more than the sector: EBIT margin 38.55%, sector 17.40%.
MetricStockSector medianPosition in sector
Return on equity47.12%14.60%Rank 90
Return on capital (Greenblatt)103.50%29.77%Rank 82
EBIT margin38.55%17.40%Rank 91
FCF margin35.65%18.54%Rank 90
Gross margin74.29%48.47%Rank 81
Growth47.1around the middleGrows about as fast as the sector.
MetricStockSector medianPosition in sector
Revenue growth, 1 year16.88%12.70%Rank 63
Earnings growth, 3 years per year4.39%9.54%Rank 36
Earnings growth, 5 years per year10.04%14.07%Rank 33
Sustainable growth (ROE × retained earnings)3.61%2.87%Rank 57
Valuation63.1above the middleValued lower than the sector: FCF yield 5.74%, sector 3.06%.
MetricStockSector medianPosition in sector
Earnings yield4.18%2.64%Rank 70
FCF yield5.74%3.06%Rank 78
EV/saleslower is better6.745.18Rank 38
EV/EBITlower is better17.4926.24Rank 67
Momentum68.3above the middleShare price doing better than the sector: Distance from 52-week high −8.07%, sector −33.23%.
MetricStockSector medianPosition in sector
Share price, 1 year−5.85%−0.59%Rank 41
Share price, 6 months25.11%−4.46%Rank 79
Share price, 3 months2.65%−5.84%Rank 64
Distance from 52-week high−8.07%−33.23%Rank 89
Quality50.2around the middleQuality about like the sector.
MetricStockSector medianPosition in sector
Accruals (Sloan)lower is better2.17%1.65%Rank 47
Change in share countlower is better−0.55%−0.17%Rank 60
Dividend streak in years128Rank 77
Price reaction to results, market-adjusted−7.73%−1.57%Rank 18
Balance sheet & risk35.6below the middleMore risk than the sector: Debt to equity 1.24, sector 0.33.
MetricStockSector medianPosition in sector
Equity ratio23.09%53.98%Rank 16
Net debt/EBITDAlower is better1.15−0.20Rank 21
Debt to equitylower is better1.240.33Rank 12
Volatility, 1 yearlower is better30.88%50.37%Rank 93

Ten years in figures

Revenue from $3.2B (2017) to $6.5B (2026), 8.4% a year.

Fiscal years, amounts in USD
YearRevenue, $BEBIT marginFCFSharesNet debt
20173.239.3%$866.1M363M−$184.6M
20183.438.1%$1.1B362M−$358.2M
20193.836.4%$1.2B362M$135.8M
20204.036.2%$1.3B361M−$6.4M
20214.136.0%$1.1B362M−$69.2M
20224.639.9%$1.4B363M$511.2M
20235.040.6%$1.6B362M−$356.3M
20245.341.2%$1.7B362M−$602.6M
20255.639.6%$1.8B362M$3.4B
20266.538.6%$2.3B360M$3.5B
8.2 / 10High MatchStockScorer score9 of 11 points

5 of 7 StockScorer Score rules met · How the score is built

Paychex Inc mainly meets criteria in the Profitability category. Result from 18 strategies checked.

This stock · Profitability: 100%This stock · Growth: 50%This stock · Valuation: 100%This stock · Momentum: 0%Median of all stocks · Profitability: 33%Median of all stocks · Growth: 0%Median of all stocks · Valuation: 0%Median of all stocks · Momentum: 0%50%100%ProfitabilityGrowthValuationMomentumThis stockMedian of all stocks

How Paychex Inc's score is built

Paychex Inc is rated here with the StockScorer Score strategy, the flagship rule set. It compares return and cash-flow metrics with the median of the company's own sector and checks growth and price trend.

5 of 7 rules met

9 of 11 points

  1. Free cash flow yield above the sector medianmet2 of 2 points
  2. Return on capital (Greenblatt ROC) above the sector medianmet2 of 2 points
  3. Return on equity above the sector medianmet1 of 1 point
  4. Free cash flow margin above the sector medianmet2 of 2 points
  5. Revenue growth above 15%met2 of 2 points
  6. 3-year earnings growth above 12% p.a.not met0 of 1 point
  7. 12-month share price more than 20 percentage points ahead of the marketnot met0 of 1 point
  8. Exclusion: financial and real estate stocksdoes not apply

Detail data

How does Paychex Inc stock perform across 18 strategies?

Excerpt from 18 strategies checked. The full evaluation is visible after a free sign-up.

12 more strategies locked

With a free account, you can see the match across all strategies checked in one complete overview.

  • Dividend Quality: 4 Factors
  • Earnings Quality: Accrual Check (Sloan)
  • Growth Momentum (CAN SLIM principle)
  • Trending Value: Value + Momentum
  • Magic Formula: Value + Quality
  • Defensive: Low Volatility
  • Dividend Aristocrats & Continuity
  • Undervalued Stocks: Multi-Factor Check
  • Levermann Strategy (13 Criteria)
  • Altman Z-Score: Stress Test
  • Acquirer's Multiple: EV/EBIT Deep Value
  • PEG Strategy (inspired by Peter Lynch)

Paychex Inc key metrics: P/E, P/B and equity ratio

Selected fundamental metrics for Paychex Inc.

MetricStockSector
P/E ratio23.935.1
P/B ratio11.35.5
Return on equity (ROE)47.1%14.6%
Equity ratio23.1%54.0%
Debt-to-equity (D/E)1.240.33
Dividend yield4.9%0.9%

Similar stocks in Technology

How comparable stocks in the same sector score in the StockScorer model.

SymbolCompanyRating
PAYXPaychex Incthis page
ROPRoper Technologies IncMedium5.5
WDAYWorkday IncLow3.6
ADSKAutodesk IncHigh8.2
ZMZoom Video Communications Inclocked
MSTRMicroStrategy Incorporatedlocked

Frequently asked questions about Paychex Inc stock

How does Paychex Inc stock (PAYX) score in the StockScorer model?
Paychex Inc stock reaches a StockScorer score of 8.2 out of 10, which is a high match with the rule-based strategies. 5 out of 7 flagship profile rules are met.
What is Paychex Inc's P/E ratio?
Paychex Inc's P/E ratio is 23.9. The Technology sector median is 35.1.
What sector is Paychex Inc in?
Paychex Inc is assigned to the Technology sector. Its rank within the sector is 58.5 out of 100: 100 means the stock leads its peer group of large and mid-cap sector stocks in every measured area.

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