Paychex, Inc. (PAYX) Stock Analysis
Score ACompounder · Grade A · Bearish
$95.04
$141.63
+49.0%
10/10
A
Compounder
Investment Thesis
Good opportunity: Solid company with good risk/reward at 7.8:1.
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: $141.63 (+49.0%). Significantly undervalued.
PEG-Based EPS
$142.55
FCF DCF Model
$142.55
EV/EBITDA
$140.09
Blended Fair Value
$141.63
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
108/120 points
Investable
ROE (3Y Avg)
43.1%
ROIC-WACC Spread
12.6%
D/E Ratio
1.2x
Current Ratio
1.3x
Interest Coverage
21x
FCF Positive Years
3/3
Quality Flags
- Leverage: D/E 1.2x (8/15 pts)
Market Sentiment
Wall Street Consensus
$110.00
+15.7% Upside
15 analysts
Range: $98.00 — $126.00
Rating: Hold
Our model is slightly more bullish than Wall Street.
Trend & Technical
Price ($94.78) is 12.6% below SMA 200 ($108.40). Bearish trend. Caution on entry.
Tech Score 51/100 — Neutral technical picture. Mixed signals across indicators.
Risk & Reward
Asymmetry Ratio
7.84:1
Expected Return
+44.5%
Bull Upside
+78.4%
Bear Downside
-10.0%
Excellent asymmetry: 7.84:1 ratio. Upside significantly outweighs downside.
Verdict: Very Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
See exact entry zones, stop-loss levels, and a personalized action plan.
AI Executive Summary
Get a detailed AI-written breakdown of the investment thesis, risks, and catalysts.
Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
Ask AI about this stock
Chat with our AI analyst to ask questions about valuation, risks, or comparisons.
Frequently Asked Questions
What is the fair value of PAYX?
Based on our multi-method conviction analysis, the estimated fair value of Paychex, Inc. (PAYX) is $141.63. 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 PAYX a buy, sell, or hold?
PAYX currently has a BUY rating with a conviction score of 10/10. Good opportunity: Solid company with good risk/reward at 7.8:1. Quantitative score: high.
Is PAYX a high-quality stock?
Paychex, Inc. has a quality grade of A (108/120 points), rated as Investable. Key metrics include ROE of 43.1%, ROIC-WACC spread of 12.6%, and D/E ratio of 1.2x.
What type of stock is PAYX?
PAYX is classified as a "compounder" in our framework. High dividend: 4.7%, Mature growth: 6.5%, Cyclical sector: Industrials, Moderate growth: 6.5%, Market-like beta: 0.82
What do Wall Street analysts say about PAYX?
15 Wall Street analysts have a consensus price target of $110.00 for PAYX, representing +15.7% upside. Targets range from $98.00 to $126.00. The consensus recommendation is "Hold". Our model is slightly more bullish than Wall Street.
What are the risks of investing in PAYX?
The risk/reward asymmetry ratio for PAYX is 7.84:1, rated as Very Favorable. Excellent asymmetry: 7.84:1 ratio. Upside significantly outweighs downside. The expected return is +44.5%, with bull case upside of +78.4% and bear case downside of -10.0%.
What is the current trend for PAYX?
PAYX is in a bearish trend. Price ($94.78) is 12.6% below SMA 200 ($108.40). Bearish trend. Caution on entry. The technical score is 51/100.
Related Stock Analyses
Best Stocks to Buy
Get the complete analysis
Scenario targets, buy zones, action plan, executive summary, technical analysis, and AI chat. All free.
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.