Paycom Software, Inc. (PAYC) Stock Analysis
Score A+Compounder · Grade A · Bearish
$140.61
$255.33
+81.6%
10/10
A
Compounder
Investment Thesis
High quantitative score: Solid company with strong risk/reward at 9.7:1.
For New Investors
Quantitative score: high
For Current Holders
Quantitative score: neutral
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $255.33 (+81.6%). Significantly undervalued.
PEG-Based EPS
$281.22
FCF DCF Model
$281.22
EV/EBITDA
$281.22
Blended Fair Value
$255.33
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
119/120 points
Investable
ROE (3Y Avg)
28.1%
ROIC-WACC Spread
12.9%
D/E Ratio
0.1x
Current Ratio
1.1x
Interest Coverage
167x
FCF Positive Years
3/3
Quality Flags
- Leverage: D/E 0.1x (14/15 pts)
Market Sentiment
Wall Street Consensus
$144.00
+2.4% Upside
16 analysts
Range: $115.00 — $195.00
Rating: Buy
Our model is slightly more bullish than Wall Street.
Trend & Technical
Price ($140.75) is 14.3% below SMA 200 ($164.27). Bearish trend. Caution on entry.
Tech Score 51/100 — Neutral technical picture. Mixed signals across indicators.
Risk & Reward
Asymmetry Ratio
9.67:1
Expected Return
+62.9%
Bull Upside
+96.7%
Bear Downside
-10.0%
Excellent asymmetry: 9.67:1 ratio. Upside significantly outweighs downside.
Verdict: Very Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
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Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of PAYC?
Based on our multi-method conviction analysis, the estimated fair value of Paycom Software, Inc. (PAYC) is $255.33. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is high.
Is PAYC a buy, sell, or hold?
PAYC currently has a STRONG_BUY rating with a conviction score of 10/10. High quantitative score: Solid company with strong risk/reward at 9.7:1. Quantitative score: high.
Is PAYC a high-quality stock?
Paycom Software, Inc. has a quality grade of A (119/120 points), rated as Investable. Key metrics include ROE of 28.1%, ROIC-WACC spread of 12.9%, and D/E ratio of 0.1x.
What type of stock is PAYC?
PAYC is classified as a "compounder" in our framework. High revenue growth: 15.7%, Low dividend (reinvesting): 1.1%, Dividend paying: 1.1%, Compounder growth range: 15.7%, High ROE (compounder): 31.0%
What do Wall Street analysts say about PAYC?
16 Wall Street analysts have a consensus price target of $144.00 for PAYC, representing +2.4% upside. Targets range from $115.00 to $195.00. The consensus recommendation is "Buy". Our model is slightly more bullish than Wall Street.
What are the risks of investing in PAYC?
The risk/reward asymmetry ratio for PAYC is 9.67:1, rated as Very Favorable. Excellent asymmetry: 9.67:1 ratio. Upside significantly outweighs downside. The expected return is +62.9%, with bull case upside of +96.7% and bear case downside of -10.0%.
What is the current trend for PAYC?
PAYC is in a bearish trend. Price ($140.75) is 14.3% below SMA 200 ($164.27). Bearish trend. Caution on entry. The technical score is 51/100.
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Last updated: May 19, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.