The stock market leaped on Friday to end another winning week, as Treasury yield traded lower to 4.63%.
Overall, S&P 500 climbed 1.6% to 4,415, while NASDAQ added 2.1% to 13,798.
Tweet of the Day
A company with a strong 'moat' — like a loyal user base or powerful product/network effects — might spend less on R&D b/c they're confident in their edge. This visual shows who spends the least amount on R&D 🧐$PAYC, $CRM, $ZI, $ADBE, $PLTR, $DT, $ZS, $DOCN, $MNDY, $NOW pic.twitter.com/HiJlMQtnNz
— Shay Boloor (@StockSavvyShay) November 10, 2023
Chart of the Day
Here is the ten-year chart of Paycom Software (PAYC) as of November 1, 2023, when the stock was at $151.
Paycom Software offers a complete cloud-based HR program for small and medium sized businesses (50-10,000 employees) that human resource personnel can log into online to process payroll and benefits for employees. Its software makes it easy to do talent acquisition and background checks, payroll and time-off requests, as well as compliance tasks such as government registrations, benefits administration, COBRA and retirement.
Paycom Software stock crashed and burned last week after management slashed revenue estimates. For 2024, management expects revenue growth of 11%-12%, while analysts had expected 21% growth. Management attributed its reduced guidance to the “cannibalization” of supposed revenues due the efficiency that came with its Beti app. Beti is Paycom’s app that allows employees to adjust their benefits on their phone. Management claims Beti is so efficient that it has curtailed the need for corrections outside of the regular payroll processing schedule, which are billable items for the company. Other factors in the slowdown include moderating usage growth for Beti and lower pre-employment service revenues.
PAYC is part of the Growth Portfolio and Aggressive Growth Portfolio. Last quarter, the company expanded into Canada. The company then announced that it will be expanding in Mexico this quarter.
