Stock (Symbol) |
Paycom Software (PAYC) |
Stock Price |
$42 |
Sector |
| Technology |
Data is as of |
| June 30, 2016 |
Expected to Report |
| Aug 2 – Aug 8 |
Company Description |
 Paycom Software, Inc. is a provider of cloud-based HCM software solution delivered as SaaS. The Company’s solution requires no customization and is -based on a core system of record maintained in a single database for all HCM functions. Talent acquisition includes applicant tracking, candidate tracker, background checks, on-boarding, e-verify & tax credit services. Time & labor management includes time and attendance, scheduling/schedule exchange, time-off requests, labor allocation & labor management reports/push reporting. Payroll includes payroll & tax management, Paycom pay, expense management and garnishment management. Talent management includes employee self-service, compensation budgeting, performance management, executive dashboard & Paycom learning. HR management includes document and task management, government and compliance, benefits, COBRA, personnel action forms, surveys and ACA dashboard. Source: Thomson Financial |
Sharek’s Take |
 Paycom Software (PAYC) has a complete cloud-based HR program that human resource personnel can log into online to process payroll and benefits for employees. Paycom makes it easy to do talent acquisition and background checks, to payroll and time-off requests, as well compliance tasks such as government registrations, benefits administration, COBRA and retirement. It even figures out the Affordable Care Act for you. PAYC had a monster qtr last qtr, posting a 33 cent profit, trouncing analyst estimates of 19 cents and shattering the previous record of 12 cents made in the year-ago qtr. This company is growing sales and profits around 50% and the stock also holds a stellar 49% Estimated Long Term Growth Rate. The only negatives are PAYC has a P/E in the 60s and the stock’s been on a run higher from $23 to $42 without a correction, thus any small correction might bring in a bunch of sellers. I feel this is a premier growth stock to own and I will look to get in on a pullback. |
One Year Chart |
 Last qtr’s 33 cent profit was truly a blockbuster. During the previous qtrs the company made $0.10, $0.08, $0.10 and $0.12. This stock certainly fits the mold, and I wish I had bought it when the stock market was down in Jan/Feb. Estimates for the next 4 qtrs call for 30%, 25%, 0% and 0% profit growth. Slowing growth probably won’t happen in my opinion, as sales are expected to grow briskly three and four qtrs from now. |
Fair Value |
 I think PAYC is worth 65x earnings. I feel this stock is fairly valued around here, yet still has significant upside to 2017’s Fair Value of $56. |
Bottom Line |
 Paycom Software is executing extremely well and just trounced analyst estimates. The best stocks of prior stock markets posted triple digit profit growth while crushing analyst estimates, thus this could be a premier stock to invest in. But PAYC hasn’t had a correction in a while and carries a P/E in the 60s, thus I will keep this stock at the top of my radar and try to get in on a small correction. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
