Paychex (PAYX) Tops Q1 Earnings and Revenue Estimates

Core Insights - Paychex reported quarterly earnings of $1.22 per share, exceeding the Zacks Consensus Estimate of $1.21 per share, and showing an increase from $1.16 per share a year ago, resulting in an earnings surprise of +0.83% [1] - The company achieved revenues of $1.54 billion for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 0.22% and up from $1.32 billion year-over-year [2] - Paychex has consistently surpassed consensus EPS estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +0.85%, with actual earnings of $1.19 per share compared to an expected $1.18 [1] - The current consensus EPS estimate for the upcoming quarter is $1.26, with projected revenues of $1.57 billion, and for the current fiscal year, the EPS estimate is $5.45 on revenues of $6.54 billion [7] Stock Performance and Outlook - Paychex shares have declined approximately 8.3% since the beginning of the year, contrasting with the S&P 500's gain of 13.3% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future due to unfavorable estimate revisions prior to the earnings release [6] Industry Context - The Internet - Software industry, to which Paychex belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable environment for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]