Core Insights - Paychex, Inc. (PAYX) reported strong first-quarter fiscal 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1] - Earnings per share were $1.2, surpassing the estimate by 1.8% and reflecting a 1.8% increase year-over-year [1] - Total revenues reached $1.3 billion, slightly above consensus and up 2.5% from the previous year [1] Revenue Breakdown - Management Solutions segment revenues increased by 1% year-over-year to $961.7 million, beating the estimate of $958.2 million [3] - Professional employer organization (PEO) and Insurance Solutions revenues totaled $319.3 million, up 7% year-over-year, but missed the estimate of $320.2 million [3] - Service revenues of $1.3 billion grew by 2% year-over-year, aligning with estimates [4] Financial Performance - EBITDA was $585.5 million, a 1% increase from the previous year, exceeding the estimate of $577.3 million [5] - Operating income rose by 2% year-over-year to $546.7 million, surpassing the projection of $533.2 million [5] - Operating margin was 41.5%, down 20 basis points from the previous year, but above the estimate of 40.5% [5] Balance Sheet & Cash Flow - Cash and cash equivalents stood at $1.5 billion, unchanged from the previous quarter [5] - Long-term debt was $798.7 million, slightly up from $798.6 million in the fourth quarter of fiscal 2024 [5] - Cash generated from operating activities was $546.1 million, with capital expenditure at $35.6 million [6] FY25 Guidance - The company expects interest on funds held for clients to be between $145 million and $155 million [7] - Anticipated other income is projected to be between $30 million and $35 million [7]

Core Insights - Paychex reported $1.32 billion in revenue for the quarter ended August 2024, a year-over-year increase of 2.5% and a surprise of +0.31% over the Zacks Consensus Estimate of $1.31 billion [1] - The EPS for the same period was $1.16, compared to $1.14 a year ago, with an EPS surprise of +1.75% over the consensus estimate of $1.14 [1] Financial Performance Metrics - Average investment balance for funds held for clients was $4.29 billion, exceeding the three-analyst average estimate of $4.21 billion [3] - Average interest rates earned on funds held for clients were 3.5%, above the three-analyst average estimate of 3.3% [3] - Average investment balance for corporate cash equivalents and investments was $1.62 billion, below the two-analyst average estimate of $1.75 billion [3] - Average interest rates earned on corporate cash equivalents and investments were 4.9%, compared to the 5.1% average estimate based on two analysts [3] - Revenue from Management Solutions was $961.70 million, slightly above the six-analyst average estimate of $959.10 million, reflecting a year-over-year change of +0.7% [3] - Revenue from interest on funds held for clients was $37.50 million, exceeding the six-analyst average estimate of $36.37 million, with a year-over-year change of +14.7% [3] - Total service revenue was $1.28 billion, matching the six-analyst average estimate, representing a year-over-year change of +2.2% [3] - Revenue from PEO and Insurance Services was $319.30 million, slightly above the six-analyst average estimate of $318.88 million, with a year-over-year change of +7.2% [3] Stock Performance - Shares of Paychex have returned +2.3% over the past month, compared to the Zacks S&P 500 composite's +2.2% change [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [4]

Paychex (PAYX) came out with quarterly earnings of $1.16 per share, beating the Zacks Consensus Estimate of $1.14 per share. This compares to earnings of $1.14 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 1.75%. A quarter ago, it was expected that this payroll processor and human-resources services provider would post earnings of $1.10 per share when it actually produced earnings of $1.12, delivering a surprise of 1.82%. Ov ...

Financial Performance - Total revenue increased by 3% to $1.319 billion in Q1 FY25, compared to $1.286 billion in Q1 FY24[5] - Adjusted diluted EPS grew by 2% to $1.16 in Q1 FY25, compared to $1.14 in Q1 FY24[5] - Excluding the expiration of ERTC and one fewer processing day, revenue grew by 7%[9] - Net cash and equivalents stand at $735 million[5] - The company returned $457 million to shareholders, including $353 million in dividends and $104 million through share repurchases[10] Revenue Drivers - Management Solutions revenue increased by 7% to $319 million, driven by growth in clients and higher product penetration[8] - PEO & Insurance Solutions revenue increased by 1% to $962 million, driven by growth in average PEO worksite employees and PEO insurance revenues[8] - Interest on Funds Held for Clients increased by 15% to $38 million due to higher average interest rates and investment balances[8] Fiscal Year 2025 Outlook - The company anticipates total revenue growth of 40% - 55% for fiscal year 2025[18] - Adjusted diluted EPS growth is projected to be 5% - 7%[18] - Interest on Funds Held for Clients is expected to be between $145 million and $155 million[18]

Core Viewpoint - Paychex, Inc. is set to release its first-quarter earnings results on October 1, with analysts expecting earnings per share to remain stable at $1.14 compared to the previous year [1][2]. Financial Performance - Analysts project Paychex will report quarterly revenue of $1.32 billion, an increase from $1.29 billion in the same quarter last year [2]. - The company reported a sales growth of 5% year-over-year to $1.295 billion, aligning closely with the analyst consensus estimate of $1.296 billion [2]. Analyst Ratings - Citigroup analyst Peter Christiansen maintained a Neutral rating and raised the price target from $125 to $145 [2]. - Barclays analyst Ramsey El-Assal maintained an Equal-Weight rating and increased the price target from $118 to $132 [2]. - TD Cowen analyst Bryan Bergin maintained a Hold rating and raised the price target from $121 to $126 [2]. - JP Morgan analyst Tien-Tsin Huang maintained an Underweight rating and increased the price target from $120 to $128 [2]. - Morgan Stanley analyst James Faucette maintained an Equal-Weight rating but reduced the price target from $125 to $122 [2]. Consensus Price Target - Paychex has a consensus price target based on the ratings of 19 analysts, with the highest target at $145 and the lowest at $120 [3].

Paychex, Inc. (PAYX) will release its first-quarter fiscal 2025 results on Oct. 1, before market open. See Zacks Earnings Calendar to stay ahead of market-making news. PAYX has delivered a decent earnings surprise in the trailing four quarters. The figure outpaced the Zacks Consensus Estimate at the same time, delivering an earnings surprise of 1.5%, on average. Paychex's First-Quarter Expectations The consensus estimates for Paychex's first-quarter fiscal 2025 revenues are pegged at $1.3 billion, indicatin ...

Core Viewpoint - Analysts project that Paychex will announce quarterly earnings of $1.14 per share, indicating no change year over year, with revenues expected to reach $1.31 billion, reflecting a 2.2% increase from the same quarter last year [1] Group 1: Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the last 30 days, indicating analysts' collective reconsideration of their initial forecasts [1][2] - Changes in earnings estimates are crucial for predicting potential investor reactions to the stock, with empirical studies showing a strong relationship between earnings estimate revisions and short-term price performance [2] Group 2: Revenue Projections - Analysts predict 'Revenue- Management Solutions' will reach $959.10 million, a change of +0.4% from the prior-year quarter [4] - The consensus estimate for 'Revenue- Total service revenue' stands at $1.28 billion, indicating a +2% change from the year-ago quarter [4] - 'Revenue- PEO and Insurance Services' is projected to reach $318.88 million, reflecting a +7.1% change from the year-ago quarter [5] Group 3: Investment Metrics - Analysts estimate 'Average investment Balance - Funds held for clients' will reach $4.21 billion, compared to $4.16 billion in the same quarter of the previous year [5] - 'Average interest rates earned (exclusive of net realized gains) - Funds held for clients' is forecasted to be 3.3%, up from 3.2% year-over-year [6] - 'Average investment Balance - Corporate cash equivalents and investments' is expected to reach $1.75 billion, compared to $1.71 billion in the previous year [6] Group 4: Market Performance - Shares of Paychex have changed by +1.9% in the past month, compared to a +1.7% move of the Zacks S&P 500 composite [7] - Paychex holds a Zacks Rank 4 (Sell), indicating expectations of underperformance relative to the overall market in the near future [7]

Core Viewpoint - Wall Street anticipates flat earnings for Paychex in the upcoming quarter, with a consensus EPS estimate of $1.14, unchanged from the previous year, while revenues are expected to rise by 2.2% to $1.31 billion [1][3]. Earnings Expectations - The earnings report is scheduled for October 1, 2024, and could lead to stock price movement depending on whether actual results exceed or fall short of expectations [2]. - A positive earnings surprise could enhance stock performance, while a miss may lead to a decline [2]. Estimate Revisions - The consensus EPS estimate has remained stable over the last 30 days, indicating that analysts have not significantly changed their outlook [4]. - The Zacks Earnings ESP model suggests that recent analyst revisions indicate a more optimistic view, with a positive Earnings ESP of +2.55% for Paychex [10]. Historical Performance - Paychex has a history of beating consensus EPS estimates, having done so in the last four quarters, including a +1.82% surprise in the most recent quarter [12][13]. - Despite this positive history, the current Zacks Rank for Paychex is 4, which complicates predictions for an earnings beat [11]. Conclusion - While Paychex shows some potential for an earnings surprise based on recent estimates, the overall outlook is mixed due to its Zacks Rank, suggesting caution for investors [16].

Core Viewpoint - Paychex (PAYX) is well-positioned to continue its earnings-beat streak in upcoming reports, supported by a history of positive earnings surprises and favorable earnings estimates [1][3]. Earnings Performance - For the last reported quarter, Paychex achieved earnings of $1.12 per share, exceeding the Zacks Consensus Estimate of $1.10 per share, resulting in a surprise of 1.82% [2]. - In the previous quarter, the company reported earnings of $1.38 per share against an expected $1.36 per share, delivering a surprise of 1.47% [2]. Earnings Estimates - There has been a favorable change in earnings estimates for Paychex, with a positive Earnings ESP (Expected Surprise Prediction) indicating strong potential for an earnings beat [3][6]. - The current Earnings ESP for Paychex is +2.55%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [6]. Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [4]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [5].

ITkach/iStock via Getty Images Paychex (NASDAQ:PAYX), a leader in the Human Capital Management software and payroll space in the United States, was founded in 1971 by Thomas Golisano, and went public in 1983. It has been a monster compounder over the years: since 1994 when Seeking Alpha's data starts, it has delivered a total return of more than 13,700% compared to the S&P 500's 1,100%. It's often a good idea to own leaders and a very good idea to own compounders, but of course, investing is about the futur ...