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Paycom Stock Jumps 10% as Q2 Earnings and Revenues Crush Estimates
ZACKS· 2025-08-07 12:55
Core Insights - Paycom Software, Inc. (PAYC) shares increased by 9.7% after reporting better-than-expected Q2 2025 results, with non-GAAP earnings of $2.06 per share, surpassing the Zacks Consensus Estimate of $1.78 [1][9] Financial Performance - The company's bottom line rose by 27.2% year over year, driven by higher revenues, improved operating efficiency, and lower income taxes [2] - Paycom's revenues reached $483.6 million, exceeding the consensus estimate of $472 million, marking a 10.5% year-over-year increase, attributed to sales momentum, international expansion, and AI integration [3][9] - Recurring revenues, which constitute 94% of total revenues, grew by 12.2% to $455.1 million, surpassing the estimate of $445.5 million [4] - Adjusted gross profits increased by 12.4% to $402.3 million, with the adjusted gross margin expanding by 140 basis points to 83.2% [5] - Adjusted EBITDA rose by 24.2% year over year to $198.3 million, with the adjusted EBITDA margin improving from 36.5% to 41% [5] Cash Flow and Balance Sheet - As of June 30, 2025, Paycom had cash and cash equivalents of $532.2 million and no debt [6] - The company generated operating cash flow of approximately $122.5 million in Q2 and $305 million in the first half of 2025, while returning $21.8 million in dividends and repurchasing $32.6 million in stock [6][7] Guidance Update - Following the strong Q2 performance, Paycom raised its 2025 revenue guidance to a range of $2.045-$2.055 billion, up from the previous range of $2.023-$2.038 billion [8] - The company expects recurring revenues to grow by 9% year over year and increased its forecast for revenues from interest on client-held funds to $113 million [8] - Adjusted EBITDA guidance for 2025 was raised to between $872 million and $882 million, indicating an EBITDA margin of approximately 43% at the midpoint [10]
Paycom Software (PAYC) Beats Q2 Earnings and Revenue Estimates
ZACKS· 2025-08-06 22:21
Company Performance - Paycom Software (PAYC) reported quarterly earnings of $2.06 per share, exceeding the Zacks Consensus Estimate of $1.78 per share, and up from $1.62 per share a year ago, representing an earnings surprise of +15.73% [1] - The company posted revenues of $483.6 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.46% and increasing from $437.51 million year-over-year [2] - Paycom has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Stock Performance - Paycom shares have increased approximately 8.9% since the beginning of the year, compared to a 7.1% gain for the S&P 500 [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.93 on revenues of $488.9 million, and for the current fiscal year, it is $8.95 on revenues of $2.03 billion [7] - The estimate revisions trend for Paycom was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Internet - Software industry, to which Paycom belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable environment for stocks in this sector [8]
Paycom Software(PAYC) - 2025 Q2 - Earnings Call Transcript
2025-08-06 22:02
Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $484 million, an increase of 11% year-over-year, with recurring and other revenue growing by 12% to $455 million [12][16] - GAAP net income was $89 million, or $1.58 per diluted share, while non-GAAP net income increased by 27% to $117 million, or $2.6 per diluted share [12][13] - Adjusted EBITDA reached $198 million, reflecting a 24% increase year-over-year, with an adjusted EBITDA margin of 41%, up 450 basis points from the prior year [13][14] - Cash and cash equivalents at the end of Q2 were $532 million, with no debt, and the average daily balance on funds held for clients was approximately $2.6 billion, up 10% year-over-year [14][15] Business Line Data and Key Metrics Changes - The introduction of the AI-driven product, iWant, is expected to enhance client engagement and satisfaction, potentially increasing recurring revenue [6][10] - The sales team has set new records every quarter, indicating strong performance across business lines [10] Market Data and Key Metrics Changes - The company has less than 5% of the total addressable market in the U.S., indicating significant growth opportunities [90] - The competitive landscape has shifted, with recent consolidations making the market less competitive for the company [90][91] Company Strategy and Development Direction - The company is focusing on innovation and automation, with significant investments in AI and product development, particularly with the launch of iWant [10][14] - The marketing strategy for iWant includes gradual activation for existing clients, with expectations to activate all clients by the end of the quarter [30][32] - The company plans to increase marketing and R&D budgets in the second half of the year to support the iWant product launch [17][59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment and the company's ability to create demand, with expectations for continued strong performance in the second half of 2025 [90] - The management team highlighted the positive client feedback regarding iWant and its potential to revolutionize user interaction with the software [9][92] Other Important Information - The company has been recognized by various publications for its sales organization and workplace culture, indicating a strong internal environment [10][11] - The board approved a quarterly dividend of $0.0375 per share, reflecting the company's strong financial position [15] Q&A Session Summary Question: How should iWant be viewed in terms of business impact? - Management views iWant as a revolutionary tool that simplifies user interaction with the system, enhancing overall engagement and efficiency [21][25] Question: What is the marketing plan for iWant? - The marketing plan includes gradual activation for clients, with training on usage prompts to ensure effective implementation [30][32] Question: How will iWant be monetized? - iWant is expected to be part of the base platform, enhancing overall product adoption and retention rather than being directly monetized [37][38] Question: What were the key drivers for the strong quarter? - Record sales and operational efficiencies contributed to the strong performance, with management noting the impact of automation on hiring and margins [42][43] Question: How is the demand environment and competitive landscape? - The demand environment remains strong, with management noting a decrease in competition due to recent market consolidations [90][91] Question: What is the outlook for future office openings? - The company is seeing success in new office openings, with plans for more regular launches as sales performance improves [99]
Paycom Software(PAYC) - 2025 Q2 - Earnings Call Transcript
2025-08-06 22:00
Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $484 million, an increase of 11% year-over-year, with recurring and other revenue growing by 12% to $455 million [13][14] - GAAP net income was $89 million, or $1.58 per diluted share, while non-GAAP net income increased by 27% to $117 million, or $2.60 per diluted share [13][14] - Adjusted EBITDA rose by 24% year-over-year to $198 million, with an adjusted EBITDA margin of 41%, reflecting a 450 basis point increase [14][15] - Cash and cash equivalents at the end of Q2 were $532 million, with no debt [15] Business Line Data and Key Metrics Changes - The introduction of the AI-driven product "iWant" is expected to enhance client engagement and satisfaction, potentially increasing recurring revenue [6][10] - The sales team has set new records every quarter, indicating strong performance across business lines [11] Market Data and Key Metrics Changes - The average daily balance on funds held for clients was approximately $2.6 billion, up 10% year-over-year [15] - Interest on funds held for clients declined by 11% year-over-year to approximately $28 million [13] Company Strategy and Development Direction - The company is focusing on innovation, particularly in AI and automation, to enhance client value and drive sales growth [11][15] - The launch of iWant is seen as a transformative step in how clients interact with the software, aiming to eliminate the need for extensive training [6][10] - The company is raising its revenue and adjusted EBITDA guidance for the year based on strong first-half results [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand environment and the potential for continued growth, citing less competition in the market [94][95] - The company anticipates that iWant will significantly impact new sales, retention, and overall client engagement [100] Other Important Information - The company plans to increase marketing and R&D budgets in the latter half of the year to support the iWant product launch [18] - Paycom has been recognized in various rankings, including being listed among the best companies by Time Magazine and Newsweek [11] Q&A Session Summary Question: How does iWant fit into the overall business strategy? - Management described iWant as a revolutionary tool that simplifies user interaction with the system, enhancing overall client experience and engagement [20][22] Question: What are the implications for gross margins with increased AI usage? - Management acknowledged the need for additional investment in technology but expects margins to improve as automation increases efficiency [28] Question: What is the marketing plan for iWant? - The marketing plan includes activating clients gradually, with expectations to have 15-20% of clients activated shortly after launch [31][32] Question: How will iWant be monetized? - iWant is expected to be part of the base platform, enhancing overall product adoption and retention without direct charges for its use [39][41] Question: What was different in Q2 compared to expectations? - Management noted record sales and efficiency gains as key factors contributing to better-than-expected performance [43][45] Question: How is the demand environment and competitive landscape? - The demand environment remains strong, with management noting a decrease in competition due to recent market consolidations [94][95]
Paycom Software(PAYC) - 2025 Q2 - Quarterly Results
2025-08-06 20:10
[Executive Summary & Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Outlook) This section provides an overview of Paycom's strong Q2 2025 financial performance, CEO strategic insights, and updated full-year 2025 financial guidance [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Paycom Software, Inc. reported strong financial results for Q2 2025, with total revenues increasing by 10.5% year-over-year to $483.6 million Q2 2025 Key Financial Highlights (YoY Comparison) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change (%) | | :-------------------------------- | :------------------ | :------------------ | :------------- | | Total Revenues | $483.6 | $437.5 | 10.5% | | Recurring and other revenues | $455.1 | $405.5 | 12.2% | | GAAP Net Income | $89.5 | $68.0 | 31.6% | | GAAP Diluted EPS | $1.58 | $1.20 | 31.7% | | Non-GAAP Net Income | $116.6 | $91.8 | 27.0% | | Non-GAAP Diluted EPS | $2.06 | $1.62 | 27.2% | | Adjusted EBITDA | $198.3 | $159.7 | 24.2% | Balance Sheet Highlights (as of June 30, 2025) | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :----------------------- | :----------------------- | :---------------------- | | Cash and Cash Equivalents | $532.2 | $402.0 | | Total Debt | $0 | $0 | - During Q2 2025, Paycom paid **$21.8 million** in cash dividends and repurchased **127,717 shares** of common stock for **$32.6 million**[5](index=5&type=chunk) [CEO Commentary and Strategic Focus](index=1&type=section&id=CEO%20Commentary%20and%20Strategic%20Focus) CEO Chad Richison highlighted strong Q2 results, robust new client additions, and the benefits clients are receiving from Paycom's automated solution - Paycom delivered very strong results, leading to raised growth and margin targets for **2025**[2](index=2&type=chunk) - The sales team achieved robust new logo additions, and clients are benefiting from the most automated solution on the market[2](index=2&type=chunk) - Paycom introduced **'IWant,'** the industry's first command-driven AI engine, aiming to extend product leadership and enhance AI and automation[2](index=2&type=chunk) [Financial Outlook for Full Year 2025](index=1&type=section&id=Financial%20Outlook%20for%20Full%20Year%202025) Paycom has raised its financial guidance for the full year ending December 31, 2025, projecting total revenues between $2.045 billion and $2.055 billion Full Year 2025 Financial Guidance | Metric | Guidance Range (Millions) | Midpoint Growth (YoY) | | :-------------------------------- | :------------------------ | :-------------------- | | Total Revenue | $2,045 - $2,055 | ~9% | | Recurring and other revenue growth | N/A | ~10% | | Interest on funds held for clients | ~$113.0 | N/A | | Adjusted EBITDA | $872.0 - $882.0 | N/A | | Adjusted EBITDA Margin | N/A | ~43% | - The company has not reconciled forward-looking adjusted EBITDA ranges and adjusted EBITDA margin to net income due to the unavailability of applicable information for future periods without unreasonable effort[8](index=8&type=chunk)[9](index=9&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) This section introduces Paycom's cloud-based HCM software, details recent financial reporting changes, and includes a forward-looking statements disclaimer [About Paycom](index=3&type=section&id=About%20Paycom) Paycom Software, Inc. is a leading provider of comprehensive, cloud-based human capital management (HCM) software - Paycom simplifies business and employees' lives through automated, command-driven HR and payroll technology[13](index=13&type=chunk) - The company's employee-first technology utilizes AI and full-solution automation to streamline processes and drive efficiencies in a single database[13](index=13&type=chunk) - Paycom's industry-first AI engine, **'IWant,'** offers instant and accurate access to employee data without requiring navigation or software learning[13](index=13&type=chunk) [Financial Reporting Notes](index=3&type=section&id=Financial%20Reporting%20Notes) Paycom made two key changes to its financial presentation: disaggregating interest on funds held for clients from recurring and other revenues and adopting the presentation of dollar amounts in millions - For the year ended December 31, 2024, Paycom changed the presentation of revenues to disaggregate interest on funds held for clients and combine recurring and other revenues[14](index=14&type=chunk) - In Q4 2024, the company adopted the presentation of dollar amounts in millions, except for per share amounts, which may cause immaterial differences in prior period amounts due to rounding[15](index=15&type=chunk) [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section clarifies that certain statements in the press release and related teleconference call are forward-looking, based on current information and subject to business and economic risks - Forward-looking statements refer to estimated or anticipated results, non-historical facts, or future events, including business strategy, operating results, cash flows, and market trends[16](index=16&type=chunk) - These statements are based on currently available information and are subject to business and economic risks, meaning actual results could differ materially[16](index=16&type=chunk) - Paycom does not undertake any obligation to update or revise forward-looking statements unless required by law[16](index=16&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section presents Paycom's consolidated balance sheets, statements of comprehensive income, and statements of cash flows for recent periods [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Paycom's total assets decreased to $4,031.2 million from $5,859.9 million at December 31, 2024, primarily driven by a significant reduction in funds held for clients Consolidated Balance Sheet Highlights (Millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $532.2 | $402.0 | | Funds held for clients | $1,616.9 | $3,665.5 | | Total current assets | $2,402.7 | $4,304.8 | | Total assets | $4,031.2 | $5,859.9 | | Client funds obligation | $1,616.9 | $3,665.7 | | Total current liabilities | $1,849.2 | $3,906.8 | | Total liabilities | $2,229.3 | $4,284.0 | | Total stockholders' equity | $1,801.9 | $1,575.9 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) For the three months ended June 30, 2025, total revenues increased by 10.5% to $483.6 million, primarily driven by a 12.2% increase in recurring and other revenues Q2 2025 Consolidated Statements of Comprehensive Income (YoY Comparison, Millions) | Metric | Q2 2025 | Q2 2024 | YoY Change (%) | | :-------------------------------- | :------ | :------ | :------------- | | Total revenues | $483.6 | $437.5 | 10.5% | | Recurring and other | $455.1 | $405.5 | 12.2% | | Interest on funds held for clients | $28.5 | $32.0 | -10.9% | | Total operating expenses | $371.3 | $342.4 | 8.4% | | Operating income | $112.3 | $95.1 | 18.1% | | Net income | $89.5 | $68.0 | 31.6% | | Diluted EPS | $1.58 | $1.20 | 31.7% | YTD June 30, 2025 Consolidated Statements of Comprehensive Income (YoY Comparison, Millions) | Metric | YTD 2025 | YTD 2024 | YoY Change (%) | | :-------------------------------- | :------- | :------- | :------------- | | Total revenues | $1,014.1 | $937.4 | 8.2% | | Recurring and other | $955.1 | $871.6 | 9.6% | | Interest on funds held for clients | $59.0 | $65.8 | -10.3% | | Total operating expenses | $716.6 | $556.4 | 28.8% | | Operating income | $297.5 | $381.0 | -21.9% | | Net income | $228.9 | $315.2 | -27.4% | | Diluted EPS | $4.06 | $5.57 | -27.1% | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities increased to $305.0 million, while net cash used in investing and financing activities significantly increased YTD June 30, 2025 Consolidated Statements of Cash Flows (YoY Comparison, Millions) | Metric | YTD 2025 | YTD 2024 | YoY Change (%) | | :-------------------------------- | :------- | :------- | :------------- | | Net cash provided by operating activities | $305.0 | $280.7 | 8.7% | | Net cash (used in) provided by investing activities | $(565.2) | $71.7 | -889.3% | | Net cash used in financing activities | $(2,129.5) | $(160.4) | 1227.6% | | (Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents | $(2,389.7) | $192.0 | -1344.6% | | Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | $1,653.1 | $2,614.7 | -36.8% | - Purchases of investments from funds held for clients amounted to **$465.8 million** in YTD 2025, compared to no such purchases in YTD 2024[22](index=22&type=chunk) - The net change in client funds obligation resulted in a cash outflow of **$2,048.8 million** in YTD 2025, a significant increase from **$24.9 million** in YTD 2024[22](index=22&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the use of non-GAAP financial measures, provides GAAP to non-GAAP reconciliations, and details stock-based compensation expenses [Use of Non-GAAP Financial Information](index=2&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) Paycom presents various non-GAAP financial measures, including Adjusted EBITDA, Non-GAAP Net Income, and Free Cash Flow, to supplement GAAP information - Non-GAAP measures like Adjusted EBITDA, non-GAAP net income, and free cash flow are used to supplement GAAP financial information[10](index=10&type=chunk) - Management utilizes these measures to review core business operations, for planning, and to provide investors with greater transparency and facilitate comparisons[10](index=10&type=chunk) - Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP data[11](index=11&type=chunk) [GAAP to Non-GAAP Reconciliations](index=8&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) Paycom provides detailed reconciliations from GAAP to various non-GAAP financial measures for both the three and six months ended June 30, 2025 and 2024 Net Income to Adjusted EBITDA Reconciliation (Millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Net income | $89.5 | $68.0 | $228.9 | $315.2 | | Non-cash stock-based compensation expense | $38.4 | $24.1 | $60.6 | $(69.7) | | Adjusted EBITDA | $198.3 | $159.7 | $451.6 | $389.2 | | Adjusted EBITDA margin | 41.0% | 36.5% | 44.5% | 41.5% | Net Income to Non-GAAP Net Income Reconciliation (Millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Net income | $89.5 | $68.0 | $228.9 | $315.2 | | Non-cash stock-based compensation expense | $38.4 | $24.1 | $60.6 | $(69.7) | | Income tax effect on non-GAAP adjustments | $(11.3) | $(0.3) | $(15.2) | $(7.0) | | Non-GAAP net income | $116.6 | $91.8 | $274.3 | $238.5 | | Non-GAAP net income per share, diluted | $2.06 | $1.62 | $4.87 | $4.22 | Free Cash Flow and Margin (Millions) | Metric | YTD 2025 | YTD 2024 | | :-------------------------------- | :------- | :------- | | Net cash provided by operating activities | $305.0 | $280.7 | | Purchases of property and equipment | $(99.4) | $(93.3) | | Free cash flow | $205.6 | $187.4 | | Free cash flow margin | 20.3% | 20.0% | [Components of Non-Cash Stock-Based Compensation Expense](index=12&type=section&id=Components%20of%20Non-Cash%20Stock-Based%20Compensation%20Expense) Non-cash stock-based compensation expense for Q2 2025 totaled $38.4 million, an increase from $24.1 million in Q2 2024 Non-Cash Stock-Based Compensation Expense (Millions) | Category | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Operating expenses | $6.2 | $4.2 | $9.4 | $7.2 | | Sales and marketing | $6.6 | $4.8 | $12.5 | $10.3 | | Research and development | $12.6 | $7.8 | $19.5 | $13.1 | | General and administrative | $13.0 | $7.4 | $19.2 | $(100.3) | | Total non-cash stock-based compensation expense | $38.4 | $24.1 | $60.6 | $(69.7) | [Additional Information](index=2&type=section&id=Additional%20Information) This section provides details for the financial results conference call and investor relations contact information [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) Paycom hosted a conference call on August 6, 2025, at 5:00 p.m. Eastern time to discuss its financial results - A conference call was held on **August 6, 2025**, at **5:00 p.m. Eastern time** to discuss financial results[12](index=12&type=chunk) - Dial-in access codes were provided for domestic (**833-470-1428**) and international (**404-975-4839**) participants, with an access code of **103375**[12](index=12&type=chunk) - A live webcast and replay of the conference call are available on Paycom's Investor Relations website at **investors.paycom.com**[12](index=12&type=chunk) [Contact Information](index=12&type=section&id=Contact%20Information) Investor relations inquiries for Paycom Software, Inc. can be directed to James Samford via phone at 800-580-4505 or email at investors@paycom.com - Investor Relations Contact: **James Samford**[31](index=31&type=chunk) - Phone: **800-580-4505**[31](index=31&type=chunk) - Email: **investors@paycom.com**[31](index=31&type=chunk)
Paycom to Report Q2 Earnings: What's in Store for the Stock?
ZACKS· 2025-08-04 15:30
Core Insights - Paycom Software, Inc. is expected to report second-quarter 2025 results on August 6, with earnings estimated at $1.78 per share, reflecting a year-over-year increase of 9.9% [1] - The consensus estimate for second-quarter revenues is approximately $472 million, indicating a rise of 7.9% from the previous year's sales of $437.5 million [2] Revenue and Earnings Expectations - Paycom's earnings have consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 7.5% [2] - Recurring revenues are projected to be $445.5 million, showing a 9.9% year-over-year increase, driven by new client acquisitions and AI-driven product innovations [4] Factors Influencing Q2 Results - Sustained growth in recurring revenues is anticipated due to new client acquisitions and advancements in AI-driven product offerings [3] - The integration of AI-enhanced payroll and HR tools is expected to improve operational efficiency and attract more businesses [4] Product Innovations and Client Engagement - Paycom's focus on improving its Beti and GONE solutions is likely to enhance client engagement and retention, with Beti reducing payroll processing effort by up to 90% and GONE delivering up to 800% ROI [5] - The strategic push into AI-driven automation is expected to expand the customer base and strengthen competitive positioning [4] Economic Environment Impact - Despite strong product innovation, Paycom's growth may be affected by a weaker macroeconomic environment, including layoffs and hiring slowdowns in various industries [6] - Geopolitical tensions and economic uncertainty are anticipated to create near-term revenue headwinds [6] Earnings Prediction - The model predicts an earnings beat for Paycom, supported by a positive Earnings ESP, although the current Zacks Rank is 4 (Sell) [7]
Is the Options Market Predicting a Spike in Paycom Stock?
ZACKS· 2025-07-24 13:55
Group 1 - The stock of Paycom Software, Inc. (PAYC) is experiencing significant attention due to high implied volatility in the options market, particularly for the Aug 15, 2025 $120.00 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant price change or an upcoming event that could lead to a major rally or sell-off [2] - Paycom currently holds a Zacks Rank 3 (Hold) in the Internet - Software industry, which is in the top 30% of the Zacks Industry Rank, with recent earnings estimates showing a decrease from $1.80 to $1.78 per share [3] Group 2 - The high implied volatility for Paycom may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay [4]
2 Stocks Down 58% and 30% to Buy Right Now
The Motley Fool· 2025-07-06 11:30
Group 1: Reddit - Reddit is currently down 30% from its all-time high, but it has become a key source of reliable information for internet users, outperforming traditional search engines [3][6] - The company is working to monetize its over 400 million weekly active unique users, with average quarterly revenue per unique user at $3.63, significantly lower than Meta Platforms' over $12 [4] - Reddit's revenue grew by 61% year over year in the first quarter, with a 23% increase in average revenue per unique user [4] - Despite facing risks from artificial intelligence, Reddit's reputation for reliable information may help it retain users [5] - The stock is trading at nearly 16 times the average analyst estimate for 2025 sales, indicating a potentially high valuation, but it has strong double-digit revenue growth potential for the long term [6] Group 2: Paycom - Paycom's stock is down 58% from its high, primarily due to the rollout of its automated Beti product, which has cannibalized other revenue sources [7][8] - Revenue growth for Paycom was around 30% prior to the pandemic but slowed to just 11% in 2024 and 6% year over year in the first quarter of 2025 [9] - The company is focused on self-disruption to enhance customer returns, with Beti being an attractive solution for companies looking to reduce costs [10] - Paycom's future growth may be impacted by economic conditions, particularly the labor market, but it is well-positioned with the Beti product [11] - The stock is trading at around 26 times forward earnings, suggesting it may be a good investment for long-term investors given its potential for robust earnings growth [11]
Down 9.5% in 4 Weeks, Here's Why You Should You Buy the Dip in Paycom (PAYC)
ZACKS· 2025-06-19 14:36
A downtrend has been apparent in Paycom Software (PAYC) lately with too much selling pressure. The stock has declined 9.5% over the past four weeks. However, given the fact that it is now in oversold territory and Wall Street analysts are majorly in agreement about the company's ability to report better earnings than they predicted earlier, the stock could be due for a turnaround.We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversol ...
PAYCOM SHAREHOLDER ALERT: Kaskela Law LLC Announces Investigation of Paycom Software, Inc. (NYSE: PAYC) and Encourages Long-Term Investors to Contact the Firm
GlobeNewswire News Room· 2025-06-16 19:20
Core Viewpoint - Kaskela Law LLC is investigating potential breach of fiduciary duty claims against Paycom Software, Inc. on behalf of long-term shareholders due to alleged securities fraud and misleading statements made by the company and its executives [1][2][5]. Financial Performance - Paycom reported disappointing financial results for Q2 2023, with the CFO indicating expected weakness in future revenue due to undisclosed negative impacts from the Beti product, leading to a nearly 20% decline in stock value [3]. - Following further disclosures on October 31, 2023, regarding strategic decisions that would result in a dramatic deceleration of revenue growth, Paycom's stock fell over 38% [4]. Legal Investigation - The investigation aims to determine if Paycom's board members violated securities laws or breached fiduciary duties related to the alleged misconduct [5]. - Current shareholders who have owned Paycom shares since at least January 1, 2023, are encouraged to contact Kaskela Law LLC for information regarding their legal rights [5].