Core Viewpoint - Paycom Software, Inc. has announced the return of Jeff York as chief sales officer, effective January 23, 2026, replacing Amy Walker who is moving to a consulting role [1] Company Leadership Changes - Jeff York previously served as CSO at Paycom from 2007 to 2021 and has been working as Paycom's Leadership Strategist since then [1] - Amy Walker is transitioning from her role as CSO to a consulting position within the company [1]

Core Insights - The article discusses the long-term investment performance of Paycom Software (PAYC), highlighting that the initial investment made in 2019 remains in the red after over six years, indicating underperformance compared to the broader stock market [1]. Company Analysis - Paycom Software has been a focus for long-term dividend growth investing, with a thorough analysis conducted before making investment decisions [1]. - The author emphasizes the importance of sharing insights and experiences with other investors, suggesting that discussions can lead to better investment decisions [1]. Investor Perspective - The author identifies as a private investor with over 15 years of experience, indicating a strong background in investment analysis and decision-making [1]. - The article aims to inform other investors about lesser-known details and facts regarding Paycom Software, fostering a community of informed investors [1].

Core Viewpoint - The fourth quarter of 2025 experienced a sharp 5% sell-off followed by a quick recovery, with global stocks reaching all-time highs, influenced by concerns over a potential AI bubble and subsequent strong earnings from NVIDIA [4][5]. Portfolio Performance & Attribution - The Polen Global Growth Composite Portfolio returned -2.5% gross of fees and -2.7% net of fees in Q4 2025, underperforming the MSCI All Country World Index, which returned +3.3% [7]. - Top relative contributors included Eli Lilly, Alphabet, and Shopify, while Oracle, Paycom Software, and CoStar Group were the largest detractors [7][8]. - Eli Lilly's stock rallied over 40% in Q4 due to strong financial results and a favorable agreement on drug pricing, despite earlier concerns [8]. - Oracle's performance reversed from the previous quarter, primarily due to skepticism regarding its future revenue tied to OpenAI, impacting its stock negatively [9]. Portfolio Activity - New positions were initiated in Tencent Holdings and Spotify, while positions in Sage Group, Willis Towers Watson, ICON Plc, and Workday were eliminated to fund these investments [10][11]. - Tencent has shown consistent earnings growth of over 30% annually for the past three years, and its valuation is considered reasonable for sustainable revenue growth [11]. - Spotify is viewed as a leading streaming network with significant growth potential, expecting over 20% annual free cash flow growth for the next five years [12]. Outlook - The datacenter capital expenditure cycle is expected to continue, driven by increasing demand and supportive government policies, suggesting a favorable environment for growth in revenues and earnings for key players [17]. - The portfolio is positioned to deliver above-average earnings growth, with a focus on sectors outside of the AI and datacenter themes, ensuring resilience regardless of market drivers [18].

Core Viewpoint - Paycom Software Inc. (NYSE:PAYC) is currently priced at $149.84, reflecting a 1.60% increase in the current market session, but has seen a decline of 6.58% over the past month and 26.99% over the past year, raising questions about its valuation despite current performance [1]. Group 1: P/E Ratio Analysis - The P/E ratio is a critical metric that compares the current share price to the company's earnings per share (EPS), helping long-term investors assess performance against historical data and industry benchmarks [3]. - Paycom Software Inc. has a P/E ratio of 18.32, which is lower than the aggregate P/E ratio of 29.3 in the Professional Services industry, suggesting that the stock may be undervalued or that investors expect it to perform worse than its peers [4]. - A lower P/E ratio can indicate undervaluation but may also reflect a lack of expected future growth from shareholders, highlighting the need for a comprehensive analysis beyond just the P/E ratio [7][8].

Company Overview - Paycom's stock has decreased by over 70% since its peak in late 2021 and is down more than 40% from its 52-week high [1] - The company reported a 9% year-over-year revenue growth in Q3 2025, with a GAAP net income margin of 22% [1] AI Integration - Paycom does not face a significant threat from AI to its business model, as it already offers outcomes through its product Beti [2] - The company has launched an AI product named IWant, which allows users to query their data via voice or text, marking a significant release since its founding [2] Product Innovation - In 2021, Paycom introduced Beti, an automated payroll platform that allows employees to manage their own payroll, which has led to a decline in other revenue types but provided substantial value to clients [3] - The company is positioned to capture market share as competitors struggle with the evolving software landscape [8] Market Context - The software industry is expected to undergo significant transformation due to advancements in AI, with some companies likely to thrive while others may struggle [4][7] - Concerns about AI disrupting the software industry have been prevalent, with predictions that traditional SaaS pricing models may become obsolete by 2028 [5] Valuation and Growth Prospects - Paycom's stock is trading at approximately 16 times the average analyst estimate for 2025 earnings, which is considered reasonable given its growth potential [8] - The company's revenue is projected to exceed $2 billion in 2025, indicating a solid growth trajectory [8]

Company Overview - Paycom Software, Inc. is a cloud-based human capital management (HCM) software provider founded in 1998, based in Oklahoma, with a market capitalization of $8.9 billion [1] Earnings Expectations - Analysts anticipate a profit of $1.96 per share on a diluted basis for Q4 2025, reflecting a 3% decrease from $2.02 per share in the same quarter last year [2] - For the current fiscal year, EPS is expected to be $7.59, down 12% from $8.62 in fiscal 2024, but projected to rise by approximately 6.1% year over year to $8.05 in fiscal 2026 [3] Stock Performance - PAYC shares have declined by 21.6% over the past 52 weeks, underperforming the S&P 500 Index's 19.3% increase and the Technology Select Sector SPDR ETF's 29% return during the same period [4] Recent Earnings Release - On November 6, PAYC shares fell by 10.7% following a mixed Q3 2025 earnings report, where revenue reached $493.3 million, exceeding estimates, but adjusted EPS was $1.94, falling short of Wall Street expectations. Additionally, total assets decreased sharply to $4.2 billion from $5.9 billion year-over-year, impacting investor confidence [5] Analyst Ratings - The consensus opinion among analysts is moderately bullish, with a "Moderate Buy" rating overall. Out of 21 analysts, six recommend a "Strong Buy," while 15 suggest a "Hold." The average analyst price target for PAYC is $204, indicating a potential upside of 29.5% from current levels [6]

Core Insights - Oakmark Select Fund outperformed the S&P 500 Index in Q4 2025, returning 8.42% compared to the index's 2.66% [1] - The fund's performance was primarily driven by strong contributions from the communication services and financial sectors, while industrials negatively impacted performance [1] Company Analysis: Paycom Software, Inc. (NYSE:PAYC) - Paycom Software, Inc. is a cloud-based human capital management solution provider with a market capitalization of $8.86 billion [2] - The stock closed at $157.50 per share on January 13, 2026, with a one-month return of -5.67% and a 52-week decline of 23.30% [2] - Paycom was the top detractor for the Oakmark Select Fund during the quarter, experiencing a decline in stock price due to underperformance in the application software sector [3] - Despite recent challenges, the fund believes Paycom has significant growth potential and that its system-of-record software will remain relevant despite advancements in AI [3] - Management's focus on share repurchases is viewed positively, as it is expected to enhance per-share value at the current stock price [3] Hedge Fund Interest - Paycom Software, Inc. was held by 35 hedge fund portfolios at the end of Q3 2025, an increase from 34 in the previous quarter [4] - The company reported total revenues of $493 million in Q3 2025, reflecting a year-over-year increase of 9.1% [4] - While Paycom is recognized for its potential, the analysis suggests that certain AI stocks may offer better upside potential and lower downside risk [4]

Group 1 - Paycom Software, Inc. (NYSE:PAYC) is considered an oversold fundamentally strong stock, with analysts providing mixed price targets and ratings [1][2][3] - TD Cowen analyst Jared Levine lowered the price target to $184 from $200 while maintaining a "Buy" rating, reflecting updated Fed Funds rate expectations [1] - Citi reduced its price target to $185 from $191, keeping a "Neutral" rating, citing stable but uncertain demand in the application software sector [2] - BTIG analyst Allan Verkhovski upgraded Paycom to "Buy" with a price target of $195, emphasizing the company's potential for double-digit recurring revenue growth despite disappointing Q3 2025 results [3] Group 2 - Paycom Software provides a cloud-based human capital management (HCM) solution as software-as-a-service, targeting small to mid-sized companies [3]

Core Viewpoint - Paycom Software has experienced a significant decline in stock value, down approximately 72% from its all-time high in November 2021, raising questions about whether this represents a broken story or a high-quality business undergoing a valuation reset, potentially presenting a buying opportunity [1] Group 1: Valuation Reset - Paycom specializes in payroll and human resources software, with a revenue base that is predominantly recurring, making the stock's drastic decline unexpected [3] - The high valuation in 2021 set a challenging growth expectation, and any signs of slowing growth prompted investors to reassess the stock's valuation [4] - Revenue growth has slowed significantly, with a 9.1% year-over-year increase in Q3 2025 compared to 30.4% growth in Q3 2021, indicating a dramatic deceleration [5] Group 2: Recent Performance - The third-quarter results for 2025 showed a sequential deceleration in growth, with 9.1% top-line growth down from 10.5% in Q2 [6] - Despite the deceleration, management projects approximately 9% total revenue growth for 2025, and share repurchases are becoming increasingly important to the investment thesis [8] Group 3: Profitability - Paycom's third-quarter growth of 9.1% is still considered solid, with recurring revenue growth at 10.6% year-over-year, representing about 95% of total revenue [9] - Profitability metrics are strong, with adjusted EBITDA margin increasing from 37.9% in the previous year to 39.4% in Q3 2025, and non-GAAP earnings per share rising 16.2% year-over-year to $1.94 [10]

Core Insights - The article discusses the importance of understanding the limitations of financial predictions and the inherent uncertainties involved in market analysis [2][3] Group 1 - Financial analysts provide median estimates for predictions and projections, which are subject to uncertainty [2] - The accuracy of price targets mentioned in the article is not guaranteed and should not be used as investment advice [2] - The past performance of investments does not guarantee future results, highlighting the unpredictable nature of the market [3]