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Company Analysis

Paychex, Inc. PAYX

A comprehensive view of key metrics, scores, and financial health for Paychex, Inc.

Overview of Paychex, Inc.

PAYX NMS
Technology Software - Application Framework: Software & SaaS Large Cap
Paychex, Inc. (PAYX), is a Large Cap company, in the Software - Application industry, last closed at $115.49, about 25.8% overvalued vs fair value, +2.4% 1Y return, placing in the top 25% of its sector.
Metrics P/E 19.8× Rev Growth 16.9% ROE 44.8% Gross Margin 74.3% Div Yield 4.57%
USD 115.49
3.01%
(Delayed)
• Vol 90d: 35.5%
52-Week Range
Market Cap
$41.11B
Enterprise Value
$45.07B
Overall Score
View breakdown
Overall
Growth
Fair
Profitability
Good
Health
Fair
Efficiency
Fair
Valuation
Good
Growth
Fair
Profitability
Good
Health
Fair
Efficiency
Fair
Valuation
Good
Completeness: 100%
Confidence: 97%
Updated: Oct 31
Top Beats

Quick Facts

Website https://www.paychex.com
HQ Rochester, NY
Employees 19,000
Fiscal year May 31

Next Events

Dividend Nov 25
Earnings Dec 18 Estimated

Fair Value Snapshot

Bear Base Bull
$79
$86
$94
Current: $115.49 -26% vs base

Engine Room Money Flow™

Large Cap

Software & SaaS - Where revenue goes and how value is created

Flow Steps
Total Revenue
$6.5B
16.9%%
Gross Profit
$4.8B
20%%
Operating Income (GAAP)
$2.5B
13.7%%
Operating Cash Flow
$2.6B
34.5%%
Money Flow Bridge
Flow Direction: Money moves from left to right
Components: Breakdown shows composition of each stage
Industry-Specific: Software & SaaS

Quality & Reliability Indicators

Gross Margin
74.3%
Excellent

Gross Profit / Revenue — pricing power and product moat (SaaS benchmark: >70%)

Locked Metric
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Owner's Pocket - Capital Allocation

Total Returned to Shareholders

Combined dividends, buybacks, and debt reduction

$2.2B
94.8% of FCF

Where It Leaks

Cash Flow Health some concerns
Moderate efficiency issues detected. Review active leaks below for improvement areas.
1
Active Leaks
0/1
Improving
0
High Impact
0
Critical
Moat Analysis Software & SaaS Specialized

Competitive Advantage Assessment

Evaluating Paychex, Inc.'s durable competitive advantages across 6 defense dimensions

Overall Moat Strength
71
/100
Moderate
Scores based on quantitative metrics and qualitative factors
Full moat analysis

Key strengths

  • Premium Software Margins Gross margin quality is strong versus peers (score 0.83), consistent with premium software economics.
  • Revenue Converts Cleanly to Cash Cash conversion is strong (score 0.95), showing scalable economics.

Key risks

  • Contracted Demand Looks Thin Contracted demand signal is weak (score 0.39), limiting evidence of strong subscription stickiness.
  • Liquidity Cushion Looks Thin Liquidity position is weak (score 0.37), leaving less room for error.

The dashed ring is the peer median. Defense scores are percentile ranks against peers, so 50 is roughly the typical company in this group.

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Pricing Power

Strong
89
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Signals, strengths and risks for Pricing Power

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Signals, strengths and risks for Recurring Revenue Stickiness

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Signals, strengths and risks for Innovation Engine

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Signals, strengths and risks for Cash Scalability

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Signals, strengths and risks for Capital Efficiency

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Signals, strengths and risks for Balance Sheet Resilience

Trade-Off Ledger™

Where management spends the performance budget - Growth, Profitability, or Safety

Software SaaS vs Industry Peers 100% Coverage
Trade-Off Triangle Visualization A ternary plot showing PAYX's balance between Growth (28.0%), Profitability (48.6%), and Safety (23.5%). Growth 28% Safety 23% Profitability 49%

Click axes to expand details. Marker shows current allocation.

3-Year Trend Analysis Locked
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Growth

50th percentile vs peers
50
Key Signals
Rev Growth YoY 16.9% 66p Revenue CAGR 3Y 9.2% 50p Def Rev Growth 0.0% 35p Buyback % -1.4% 74p EPS Growth YoY 6.8% 38p
Strengths
  • Rule of 40 in top 20% of peers (52.5%, 88th percentile)
  • FCF Margin in top 20% of peers (35.6%, 95th percentile)
  • Superior capital returns - 2 return metrics above peer median
  • Operating Cash Flow Margin in top 20% of peers (39.3%, 93th percentile)
Risks

No significant risks identified for this axis.

Profitability

87th percentile vs peers
87
Key Signals
Strengths
Risks
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Safety

42th percentile vs peers
42
Key Signals
Strengths
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Two Futures

Scenario-based fair value ranges for Paychex, Inc..

Loading valuation model...
Unable to Compute Fair Value

This company cannot be valued using standard models.

What this means: The Scenario Theatre requires financial data (revenue, cash flow, shares outstanding) to calculate fair value estimates. This data may be unavailable for:

  • Recently listed companies (IPOs, SPACs)
  • Shell companies or holding companies
  • Companies that haven't filed recent financials
  • Foreign companies with limited data coverage
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Bear
-
- - -
- upside
-
Base
$85.65
- - -
-25.8% vs current
Snapshot base estimate
Bull
-
- - -
- upside
-
Fair Value Range Current: $-
$- $- $-
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