Paycom Reports 9% Revenue Growth for 2025 Amid Valuation Reset
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 05 2026
0mins
Should l Buy PAYC?
Source: NASDAQ.COM
- Decelerating Revenue Growth: Paycom's Q3 2025 revenue grew 9.1% year-over-year to $493.3 million, a significant drop from the 30.4% growth seen in Q3 2021, indicating pressure on the company amid high valuation expectations.
- Sustained Profitability: Despite the slowdown, Paycom's adjusted EBITDA margin increased from 37.9% in the prior year to 39.4%, demonstrating strong profitability trends that bolster investor confidence in the company's financial health.
- Share Repurchase Strategy: In Q3 2025, Paycom repurchased $223.4 million in stock, and if this pace continues, it could reduce the share count by approximately 10% over the next three quarters, enhancing earnings per share.
- Market Competition Pressure: While the company shows solid revenue and profitability, the intense competition in the online payroll and HR management space raises concerns about its growth strategy, which could further impact its valuation moving forward.
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Analyst Views on PAYC
Wall Street analysts forecast PAYC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PAYC is 201.82 USD with a low forecast of 165.00 USD and a high forecast of 245.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
3 Buy
11 Hold
0 Sell
Hold
Current: 131.590
Low
165.00
Averages
201.82
High
245.00
Current: 131.590
Low
165.00
Averages
201.82
High
245.00
About PAYC
Paycom Software, Inc. is a provider of a comprehensive, cloud-based human capital management (HCM) solution delivered as software-as-a-service (SaaS). The Company provides functionality and data analytics that businesses need to manage the complete employment lifecycle, from recruitment to retirement. Its solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (HR) management applications. The Company's applications streamline client processes and provide clients and their employees with the ability to directly access and manage administrative processes, including applications that identify candidates, on-board employees, manage time and labor, administer payroll deductions and benefits, manage performance, terminate employees and administer post-termination health benefits, such as COBRA.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Reaction and Risks: Recent signs of labor market weakness, including an ADP report indicating only 22,000 new private sector jobs, may heighten expectations for further Fed rate cuts, although investors remain optimistic about economic resilience.
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- Efficiency Improvements: A technology company reported an 80% reduction in payroll processing time, while a hospitality leader noted a 50% decrease in HR process time post-implementation, showcasing Paycom's robust capability in enhancing operational efficiency.
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- Automation Decision Advantages: Paycom's single-database architecture enables the application of automation and decision logic, improving data accuracy and efficiency, which helps clients achieve measurable ROI and further solidifies its market position.
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Sather Financial Increases Stake in Paycom Software Amid Declining Valuation
- Increased Stake: Sather Financial Group disclosed in an SEC filing on January 26, 2026, that it purchased an additional 18,035 shares of Paycom Software for $3.20 million during Q4, although the total position value decreased by $9.32 million due to share price fluctuations, indicating market uncertainty.
- Ownership Proportion Change: As of December 31, 2025, Sather's stake in Paycom rose to 2.3%, representing a significant portion of its $1.86 billion reportable U.S. equity AUM, reflecting continued confidence in the company.
- Market Performance: As of January 23, 2026, Paycom's shares were priced at $152.29, down 25.3% over the past year and underperforming the S&P 500 by 38.3 percentage points, highlighting the growth challenges faced by the company.
- Valuation Attractiveness: Despite Paycom's stock price declining over 60% in the past five years, its current P/E ratio of about 19 is significantly lower than the pandemic peak of 150, potentially offering a more attractive entry point for long-term investors.
See More
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- Share Increase: Sather Financial Group Inc disclosed in an SEC filing on January 26, 2026, that it purchased an additional 18,035 shares of Paycom Software during Q4, with an estimated trade size of $3.20 million, indicating ongoing confidence in the company.
- Position Value Decline: Despite the increase in shares, the total position value in Paycom fell by $9.32 million, reflecting the impact of share price movements and new purchases, suggesting market concerns about future growth.
- Market Performance: Paycom's stock is currently trading near a five-year low, with revenue growth declining from over 25% five years ago to around 10% in the first nine months of 2025, indicating a slowdown that may affect investor sentiment.
- Valuation Appeal: Despite challenges, Paycom's P/E ratio is approximately 19, significantly down from over 150 during the pandemic, making it appear more attractive in the current market environment and potentially offering opportunities for long-term investors.
See More
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- Leadership Change: Paycom announced that Jeff York will return as Chief Sales Officer effective January 23, 2026, replacing Amy Walker, who will transition to a consulting role, aiming to drive growth through leadership continuity.
- Sales Strategy Expertise: York brings over three decades of sales management experience, having served as CSO from 2007 to 2021, during which his sales team was recognized as one of the 50 Best Companies to Sell For in the U.S., showcasing his strategic prowess in sales.
- Commitment to Growth: Paycom's founder and CEO, Chad Richison, stated that York's return will continue to drive the company's growth in full solution automation for clients and ensure strong ROI for customers.
- Innovation in Technology: Paycom is renowned for its industry-first AI engine, IWantTM, which simplifies HR and payroll processes, and York's leadership is expected to further enhance the application of this innovative technology, improving client experience and operational efficiency.
See More
U.S. Jobs and Inflation Data Set for Release
- Job Data Expectations: The U.S. is expected to add 60,000 jobs in January, up from 50,000 in December, which could influence the Fed's monetary policy direction amidst ongoing economic uncertainty.
- Inflation Metrics Analysis: The January Consumer Price Index is projected to rise by 0.29% month-over-month and 2.5% year-over-year, showing improvement but still falling short of the Fed's 2% target, potentially affecting investor rate expectations.
- Market Reaction and Risks: Recent signs of labor market weakness, including an ADP report indicating only 22,000 new private sector jobs, may heighten expectations for further Fed rate cuts, although investors remain optimistic about economic resilience.
- Stock Market Rotation Trend: A significant rotation within the stock market is underway, with the Dow Jones Industrial Average rising over 2% this week, reflecting confidence in economic recovery, despite ongoing weakness in tech stocks.
See More
Software Giants Face Significant Stock Declines
- Software Stock Performance: This week, software giants like Intuit and Palantir were identified as oversold stocks, with Palantir's shares dropping over 13% and an RSI of 26.3, indicating potential for a short-term bounce; however, analysts believe its valuation is unsustainable with a price target of $50, implying a 67% downside.
- Market Sentiment Deterioration: Mixed earnings results from the 'Magnificent Seven' have dampened investor confidence in the bull market, leading to declines in technology stocks that weighed on both the S&P 500 and Nasdaq, which closed in the red this week.
- ServiceNow's Earnings Fail to Boost: Despite ServiceNow beating Wall Street's fourth-quarter earnings expectations and providing optimistic guidance on Wednesday, its stock still fell over 12%, reflecting market concerns about the potential disruption of software business models by artificial intelligence.
- Strong Memory Stock Performance: In contrast to software stocks, memory stocks like Sandisk and Lam Research surged 22% and 7% this week, respectively, driven by rising memory prices linked to data center compute demand, with Sandisk reporting a 64% growth in its data center business.
See More
Paycom's Full-Solution Automation Significantly Boosts Productivity
- Productivity Gains: A Nucleus Research study reveals that organizations utilizing Paycom's full-solution automation experience up to a 64% increase in overall HCM productivity, indicating significant benefits from automated processes like payroll and onboarding.
- Efficiency Improvements: A technology company reported an 80% reduction in payroll processing time, while a hospitality leader noted a 50% decrease in HR process time post-implementation, showcasing Paycom's robust capability in enhancing operational efficiency.
- Significant ROI: An Amazon delivery service partner achieved a 205% annual return on investment after expanding its use of Paycom, attributed to a 79% reduction in overtime, 85% decrease in onboarding time, and 88% less auditing time, highlighting the effectiveness of Paycom's tools in cost control.
- Automation Decision Advantages: Paycom's single-database architecture enables the application of automation and decision logic, improving data accuracy and efficiency, which helps clients achieve measurable ROI and further solidifies its market position.
See More
Sather Financial Increases Stake in Paycom Software Amid Declining Valuation
- Increased Stake: Sather Financial Group disclosed in an SEC filing on January 26, 2026, that it purchased an additional 18,035 shares of Paycom Software for $3.20 million during Q4, although the total position value decreased by $9.32 million due to share price fluctuations, indicating market uncertainty.
- Ownership Proportion Change: As of December 31, 2025, Sather's stake in Paycom rose to 2.3%, representing a significant portion of its $1.86 billion reportable U.S. equity AUM, reflecting continued confidence in the company.
- Market Performance: As of January 23, 2026, Paycom's shares were priced at $152.29, down 25.3% over the past year and underperforming the S&P 500 by 38.3 percentage points, highlighting the growth challenges faced by the company.
- Valuation Attractiveness: Despite Paycom's stock price declining over 60% in the past five years, its current P/E ratio of about 19 is significantly lower than the pandemic peak of 150, potentially offering a more attractive entry point for long-term investors.
See More
Sather Financial Increases Stake in Paycom Software
- Share Increase: Sather Financial Group Inc disclosed in an SEC filing on January 26, 2026, that it purchased an additional 18,035 shares of Paycom Software during Q4, with an estimated trade size of $3.20 million, indicating ongoing confidence in the company.
- Position Value Decline: Despite the increase in shares, the total position value in Paycom fell by $9.32 million, reflecting the impact of share price movements and new purchases, suggesting market concerns about future growth.
- Market Performance: Paycom's stock is currently trading near a five-year low, with revenue growth declining from over 25% five years ago to around 10% in the first nine months of 2025, indicating a slowdown that may affect investor sentiment.
- Valuation Appeal: Despite challenges, Paycom's P/E ratio is approximately 19, significantly down from over 150 during the pandemic, making it appear more attractive in the current market environment and potentially offering opportunities for long-term investors.
See More
Paycom Appoints Jeff York as Chief Sales Officer Effective January 23, 2026
- Leadership Change: Paycom announced that Jeff York will return as Chief Sales Officer effective January 23, 2026, replacing Amy Walker, who will transition to a consulting role, aiming to drive growth through leadership continuity.
- Sales Strategy Expertise: York brings over three decades of sales management experience, having served as CSO from 2007 to 2021, during which his sales team was recognized as one of the 50 Best Companies to Sell For in the U.S., showcasing his strategic prowess in sales.
- Commitment to Growth: Paycom's founder and CEO, Chad Richison, stated that York's return will continue to drive the company's growth in full solution automation for clients and ensure strong ROI for customers.
- Innovation in Technology: Paycom is renowned for its industry-first AI engine, IWantTM, which simplifies HR and payroll processes, and York's leadership is expected to further enhance the application of this innovative technology, improving client experience and operational efficiency.
See More
