PAYX
Paychex, Inc.$98.38
Unclear
Target $101.71
Report: Mar 11, 2026Industrials • Staffing & Employment Services • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$98.38+3.4%
Rec: UnclearConviction: High
Entry Target
$78.24
(20% below current)
Fair Value
$101.71
(3% above current)
Stop Loss
$86.89
(12% below current)
Position Size
Half
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$161.24
52 Week Low$86.89
Avg. 3 Month Volume4.02M
Efficiency
LTM Gross Margin73.9%
LTM EBITDA Margin45.3%
LTM EBIT Margin38.8%
LTM Operating Margin36.9%
LTM ROA9.7%
LTM ROE40.9%
LTM ROIC36.4%
LTM ROCE28.1%
Capital Structure
Market Cap (MM)$33.0B
Enterprise Value (MM)$36.2B
Shares Outstanding358.70M
Total Debt (MM)$5.01B
Cash & Equivalents (MM)$1.79B
LTM Net Debt (MM)$3.22B
LTM Net Debt/EBITDA1.1x
Growth
TTM Rev. Growth16.4%
Last 3-Yr Rev. CAGR8.8%
Last 3-Yr EBITDA CAGR10.0%
Last 3-Yr EPS CAGR2.9%
Valuation
Street Target Price$117.00
LTM EV/Revenue5.7x
LTM EV/Gross Profit7.7x
LTM EV/EBIT14.7x
LTM EV/EBITDA12.6x
LTM P/E20.2x
LTM EV/FCF17.3x
LTM P/FCF15.8x
LTM P/TB2.9x
LTM P/B8.2x
Dividend Yield4.7%
Payout Ratio94.9%
Executive SummarySituation: Current price is $98.38 versus fair value $101.71 (3.4% expected return), and valuation confidence is stable. Debate: Bull case depends on Realization of $100 million in cost synergies from the Paycor integration. Bear case centers on AI Commoditization of Payroll Services. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Paychex successfully integrates Paycor, capturing $100 million in cost synergies and accelerating upmarket growth to 16.5-18.5% in fiscal 2026. Agentic AI tools drive operating margins back above 41%, while the $1 billion buyback program effectively offsets dilution and enhances EPS growth.
Bear Case
AI native competitors commoditize basic payroll services, leading to permanent erosion of revenue per client. Integration of Paycor proves more complex than anticipated, resulting in sustained margin compression and a failure to achieve projected synergies amidst a softening SMB economic environment.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Realization of $100 million in cost synergies from the Paycor integration. This is critical because it would validate management's M&A strat...
Near-Term (0-6 months)Impact: Moderate
Full-scale rollout of agentic AI workflows across the service organization. This addresses the market's concern over labor-intensive service...
Long-Term (18+ months)Impact: Moderate
Paychex is at a critical juncture as it laps the initial disruption of the Paycor acquisition and enters the peak synergy realization phase,...
Primary Risks
Concern: Medium
AI Commoditization of Payroll Services. The mechanism is a structural shift where AI-native competitors offer payroll as a free or low-cost...
Concern: High
Integration Failure of Paycor. The risk is that the $3.2 billion acquisition fails to generate the projected $100 million in synergies, leav...
Concern: Medium
The stewardship verdict is a 'Status Quo' execution play. The governance outcome tree suggests: 1. **Status Quo**: Management successfully i...
Recent Activity
2025-06-25SEC Filing (8-K)
-9.40%Paychex reported Q4 and full year 2025 results with 10% Q4 revenue growth following Paycor acquisition.
2025-04-09Market Movement
+6.67%Market/Sector Move +6.67%
2024-06-26SEC Filing (8-K)
-6.11%Paychex reported Q4 and full year 2024 results with 5% revenue growth and issued fiscal 2025 outlook.
2023-12-21SEC Filing (8-K)
-7.01%Paychex reported Q2 and H1 fiscal 2024 results with 6% revenue growth and raised full-year earnings outlook.
2023-03-29SEC Filing (8-K)
+6.47%Paychex reported Q3 fiscal 2023 results with 8% revenue growth and updated guidance.
Valuation Table
9.8/10Decision Grade
Scenario Range
$81
Bear
$100
Base
$138
Bull
$98