Paychex, Inc.
- Open
- 119.52
- Day high
- 121.72
- Day low
- 119.42
- Prev close
- 121.18
- Volume
- 2.1M
- Mkt cap
- $42.8B
- P/E (TTM)
- 24.5
- EPS (TTM)
- $4.95
- P/B
- 11.5
- P/S
- 6.6
- Yield
- 3.77%
- Per share
- $4.54
- ▼Insiders net selling -$3.8M over the last 3 months (0 open-market buys, 5 sales)
- 🏛Institutions mixed (13F)
Paychex, Inc. (PAYX) is a Industrials company listed on NASDAQ. The stock is down 13% over the past year. Over the trailing 3 months, insiders filed 0 open-market buys and 5 sales (SEC Form 4).
Paychex, Inc. (PAYX) financials & analyst ratings
Fundamentals (TTM)
Analyst consensus · 6 analysts
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
PAYX earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jun 24, 2026 | $1.31 | $1.32 | +0.8% | $1.6B | +0.3% |
| Mar 25, 2026 | $1.67 | $1.71 | +2.4% | $1.8B | +1.5% |
| Dec 19, 2025 | $1.23 | $1.26 | +2.4% | $1.6B | +0.3% |
| Sep 30, 2025 | $1.20 | $1.22 | +1.7% | $1.5B | +0.1% |
| Jun 25, 2025 | $1.19 | $1.19 | +0.0% | $1.4B | -1.1% |
| Mar 26, 2025 | $1.48 | $1.49 | +0.7% | $1.5B | +0.0% |
| Dec 19, 2024 | $1.13 | $1.14 | +0.9% | $1.3B | +0.3% |
| Apr 2, 2024 | $1.37 | $1.38 | +0.7% | $1.4B | -1.3% |
| Dec 21, 2023 | $1.07 | $1.08 | +0.9% | $1.3B | -13.9% |
| Dec 22, 2022 | $0.95 | $0.99 | +4.2% | $1.2B | +0.0% |
| Dec 22, 2021 | $0.80 | $0.91 | +13.7% | $1.1B | -9.1% |
| Sep 30, 2021 | $0.80 | $0.89 | +11.2% | $1.1B | +3.9% |
PAYX insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Jul 21, 2026 | Schrader Robert L.officer: Sr. VP, CFO | Sell | 2,600 | $115.09 |
| Jul 17, 2026 | Roaldsen Elizabethofficer: Sr. Vice President | Tax | 2,383 | $110.00 |
| Jul 17, 2026 | Argiropoulos Masonofficer: VP, Chief HR Officer | Grant | 14,777 | $110.00 |
| Jul 17, 2026 | Gibson John Bofficer: President and CEO | Grant | 96,971 | $110.00 |
| Jul 17, 2026 | Gibson John Bofficer: President and CEO | Tax | 14,083 | $110.00 |
| Jul 17, 2026 | Parodi Chad Cofficer: SVP, HCM, PEO & Insurance | Tax | 300 | $110.00 |
| Jul 17, 2026 | BERGSTROM RYAN NORMANofficer: Chief Product Officer | Tax | 303 | $110.00 |
| Jul 17, 2026 | ANTE ADAM BROOKSofficer: Sr. Vice President, Paycor | Grant | 3,409 | — |
| Jul 17, 2026 | Argiropoulos Masonofficer: VP, Chief HR Officer | Grant | 2,182 | — |
| Jul 17, 2026 | Parodi Chad Cofficer: SVP, HCM, PEO & Insurance | Grant | 18,471 | $110.00 |
| Jul 17, 2026 | Argiropoulos Masonofficer: VP, Chief HR Officer | Tax | 386 | $110.00 |
| Jul 17, 2026 | Simmons Christopher Cofficer: VP, Controller & Treasurer | Grant | 1,818 | — |
| Jul 17, 2026 | Simmons Christopher Cofficer: VP, Controller & Treasurer | Grant | 11,082 | $110.00 |
| Jul 17, 2026 | BERGSTROM RYAN NORMANofficer: Chief Product Officer | Grant | 3,409 | — |
| Jul 17, 2026 | Schrader Robert L.officer: Sr. VP, CFO | Tax | 2,382 | $110.00 |
Source: PAYX SEC Form 4 filings, latest Jul 21, 2026. For informational purposes only — not investment advice.
See the full PAYX insider & 13F page →Paychex, Inc. company profile
Overview
Paychex, Inc. (NASDAQ:PAYX) is a leading provider of integrated human capital management solutions founded in 1971 and headquartered in Rochester, New York. The company went public in 1983 and has grown to become one of the largest payroll and HR services providers in the United States, serving over 740,000 small to medium-sized businesses across the US, Europe, and India. Paychex operates through a comprehensive suite of cloud-based solutions that handle everything from basic payroll processing to complex HR outsourcing, benefits administration, and retirement services.
Business
Paychex operates in the human capital management (HCM) industry, providing integrated technology and service solutions that help small and medium-sized businesses manage their workforce operations. The company's core offering centers around payroll processing - the fundamental service of calculating employee wages, withholding taxes, and ensuring compliance with federal, state, and local regulations. However, Paychex has evolved far beyond basic payroll into a comprehensive HR technology platform. The company operates through two primary business segments. The Management Solutions segment, representing approximately 73% of total revenue, includes payroll services, HR solutions, retirement services, time and attendance systems, and various compliance tools delivered through their cloud-based Paychex Flex platform. This segment serves businesses that want to maintain direct employment relationships with their workers while outsourcing administrative functions. The PEO and Insurance Solutions segment, accounting for roughly 24% of revenue, operates as a Professional Employer Organization where Paychex becomes the legal co-employer of client workers. In this arrangement, Paychex takes on significant HR responsibilities including benefits administration, workers' compensation, and regulatory compliance, while clients maintain day-to-day operational control. This model allows small businesses to access enterprise-level benefits and HR expertise typically available only to larger companies. The remaining 3% of revenue comes from Interest on Funds Held for Clients, earned on the substantial cash balances Paychex holds between collecting payroll funds from clients and disbursing payments to employees and tax authorities. This creates a natural float that generates investment income, though this revenue stream fluctuates with interest rate environments.
Revenue model
Paychex generates revenue through multiple complementary business models that create recurring, predictable cash flows. The primary revenue driver is subscription-based fees for payroll processing and HR services, typically charged per employee per month or as flat monthly fees depending on service complexity. These subscriptions create high customer switching costs due to the mission-critical nature of payroll and the administrative burden of changing providers. The company's PEO model generates revenue through administrative fees plus markup on benefits and insurance products. As the co-employer, Paychex can negotiate better rates on health insurance, workers' compensation, and other benefits due to its large scale, then pass along competitive rates to small business clients while retaining a margin. This model benefits from economies of scale - the larger Paychex's PEO workforce becomes, the better rates it can negotiate. Ancillary services provide additional revenue streams including retirement plan administration, time and attendance systems, HR consulting, and various compliance services. These services often have higher margins than core payroll and create deeper client relationships that improve retention. The float income model generates revenue from the timing difference between when Paychex collects payroll funds from clients and when it disburses payments. During this period, funds are invested in high-quality, short-duration securities. This revenue stream increases during rising interest rate environments and decreases when rates fall. Several factors influence Paychex's margins and profitability. Interest rate environments directly impact float income - higher rates boost this revenue stream significantly. Employment levels and wage growth among client businesses drive both the number of employees processed and the dollar amounts involved. Competition from both traditional providers and new fintech entrants can pressure pricing, though Paychex's comprehensive service offering and high switching costs provide some protection. Regulatory complexity can be both a headwind (increasing compliance costs) and a tailwind (driving demand for outsourced expertise). Technology investments require ongoing capital but drive long-term efficiency gains and competitive differentiation.
Competitive moat
Paychex possesses a moderately strong economic moat built primarily on high switching costs and economies of scale. The switching costs are substantial because payroll processing is mission-critical - any disruption can result in compliance violations, employee dissatisfaction, and potential legal issues. The administrative burden of changing payroll providers, including data migration, system integration, and staff retraining, creates significant friction that keeps clients sticky. The company's high client retention rates, consistently above 80%, demonstrate this switching cost advantage. The company benefits from economies of scale in multiple areas. Its large client base allows it to spread technology development costs across millions of users, negotiate better rates with benefits providers and insurance companies (particularly valuable in the PEO business), and maintain cost-effective compliance expertise across numerous jurisdictions. Paychex processes payroll for over 740,000 clients, giving it substantial scale advantages over smaller competitors. Network effects provide a modest additional moat. As more businesses use Paychex services, the company accumulates more data about employment trends, compensation benchmarks, and HR best practices, which it can use to improve its AI-driven insights and advisory services. The company processes over 14 billion data elements annually, creating a valuable dataset for predictive analytics. However, the moat faces several challenges. Technology disruption from fintech companies offering simplified, lower-cost payroll solutions threatens the low end of Paychex's market. Companies like Gusto and Rippling have gained traction by offering modern user interfaces and integrated HR platforms. Large enterprise software vendors like Workday and ADP continue to push downmarket, potentially competing for Paychex's mid-market clients. Additionally, the commoditization risk in basic payroll processing means Paychex must continuously invest in value-added services to maintain pricing power. The moat is moderate rather than exceptional because while switching costs are real, they're not insurmountable, and the core payroll processing function is becoming increasingly commoditized. Paychex's long-term competitive position depends on its ability to evolve from a payroll processor into an indispensable HR technology and advisory partner.
Risks & safety
Paychex demonstrates a strong margin of safety with minimal financial risk and reasonable valuation metrics for a mature, profitable business. • Financial Strength: The company maintains excellent financial health with $1.56 billion in cash and short-term investments, minimal debt (debt-to-equity ratio of 0.21), and strong cash generation. Free cash flow of $667 million in the most recent quarter demonstrates robust cash conversion. • Solvency: Current ratio of 1.39 and quick ratio of 1.39 indicate adequate liquidity, though the nature of the business involves holding client funds as liabilities. The company has no meaningful solvency risk given its strong balance sheet and predictable cash flows. • Valuation Metrics: Trading at 26.3x P/E ratio and 17.9x EV/EBITDA, representing a reasonable premium for a high-quality, recurring revenue business. Price-to-book ratio of 13.3x reflects the asset-light nature of the business model. • Business Quality: High-quality recurring revenue model with 80%+ client retention rates, 34% net margins, and 12.6% ROE. The predictable nature of payroll processing creates stable cash flows even during economic downturns. • Growth Trajectory: Consistent mid-single-digit revenue growth with margin expansion opportunities through operational efficiency and higher-value service adoption.
Recent development
Over the past few years, Paychex has undergone significant strategic evolution, transforming from a traditional payroll processor into a comprehensive HR technology and advisory platform. The company has made substantial investments in artificial intelligence and data analytics, developing over 200 AI models to improve customer service, sales productivity, and predictive insights. Key AI-powered innovations include the HR Copilot tool, Recruiting Copilot for talent acquisition, and predictive analytics for employee retention. The company has aggressively expanded its digital marketplace strategy with the launch of Paychex Perks, a platform where employees can access discounts and benefits from various vendors. Over 100,000 client employees have already engaged with this marketplace, demonstrating strong adoption of value-added services beyond core payroll. Strategic acquisitions have become a key growth driver, culminating in the major announcement of the Paycor acquisition expected to close in fiscal 2025. This $1.8 billion deal represents Paychex's largest acquisition and is expected to generate over $80 million in cost synergies while expanding the company's mid-market presence. The company has also made smaller strategic acquisitions in working capital solutions and accounts receivable financing to enhance its service offering. The PEO business has emerged as a significant growth engine, showing consistent high-single-digit to double-digit growth rates. Paychex has enhanced its "Employer of Choice Playbook" to help clients attract and retain talent in tight labor markets, positioning the PEO offering as a comprehensive solution for workforce management challenges. Technology platform modernization has been ongoing with continued investment in the Paychex Flex platform, enhanced mobile capabilities, and integration of generative AI throughout the user experience. The company has also focused on improving its go-to-market strategies and sales productivity through AI-driven insights and automation.
PAYX company profile · for informational purposes only — not investment advice.
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