Paychex Inc. (PAYX): Here Are Some Research Recommendations

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MNDY Stock
MNDY Stock

Paychex Inc. (NASDAQ:PAYX) finished Wednesday with a subtraction of -$2.13 to close at $117.91, a downside of -1.77 percent. An average of 1,549,100 shares of common stock have been traded in the last five days. There was a fall of -$3.24 in the past week, and it reached a new high 27 times over the past 12 months. The last 20 days have seen an average of 1,543,450 shares traded, while the 50-day average volume stands at 1,474,810.

PAYX stock has decreased by -13.26% in the last month. The company shares reached their 1-month lowest point of $117.24 on 09/16/22. With the stock rallying to its 52-week high on 04/06/22, shares of the company touched a low of $106.55 and a high of $141.92 in 52 weeks. It has reached a new high 5 times so far this year and lost -13.62% or -$18.59 in price. In spite of this, the price is down -16.92% from the 52-week high.


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Insider Transactions

52 days have passed since Paychex Inc. (PAYX) last reported insider trading activity. Schrader Robert L., who is VP/Controller, most recently acquired $545 shares at $126.58 per share on Aug 01. In this transaction, the insider spent $68,986. Sr. Vice President, CFO, RIVERA EFRAIN, disposed of 6,458 shares at a price of $117.91 on Jul 19. The insider now owns more than $761,463 worth of shares. Prior to that, Sr. Vice President, CFO RIVERA EFRAIN went on to Sale 30,866 shares at $116.13 each on Jul 18. An amount of $3,584,583 was transacted.

Valuation Metrics

Paychex Inc. (PAYX) has a trailing price-to-earnings (P/E) ratio of 30.74. The stock’s beta is 1.00. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 9.12, the price-to-book (PB) ratio at 13.77, and the price-to-cash flow ratio at 84.93.

The company has a payout ratio of 71.70%. The company’s most recent quarterly dividend payment was $0.79 a share, without any change from last year. Its latest increase dividend $0.13 reported on Friday April 29 2022.

Financial Health

The quick ratio of Paychex Inc. for the three months ended May 30 was 1.20, and the current ratio was 1.20, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.26 and a total debt to equity ratio of 0.26 for the quarter ending May 30. Its gross profit as reported stood at $3.26 billion compared to revenue of $4.61 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Paychex Inc.’s return on assets was 14.30%.

Earnings Surprise

For the three-month period that ended May 30, Paychex Inc. had $853.9 million in cash and short-term investments compared to $797.7 million in total debt. In the quarter under review, the net income was down than the previous quarter. The company posted a net income of $296.4 million in the quarter, while revenues were grew 11.27%. The analyst consensus anticipated Paychex Inc.’s latest quarter earnings to come in at $0.79 per share, but it turned out to be $0.81, a 2.50% surprise. For the quarter, EBITDA amounted to $501.6 million. Shareholders own equity worth $359.91 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Paychex Inc. (PAYX) price momentum. RSI 9-day as of the close on 21 September was 31.16%, suggesting the stock is Neutral, with historical volatility in this time frame at 26.55%.

As of today, PAYX’s price is $119.71 -2.67% or -$3.24 from its 5-day moving average. PAYX is currently trading -12.66% lower than its 20-day SMA and -10.94% lower than its 100-day SMA. However, the stock’s current price level is +2.66% above the SMA50 and -1.58% below the SMA200.

The stochastic %K and %D were 23.12% and 25.07%, respectively, and the average true range (ATR) was 3.01. With the 14-day stochastic at 6.02% and the average true range at 2.91, the RSI (14) stands at 35.04%. The stock has reached -1.96 on the 9-day MACD Oscillator while the 14-day reading was at -2.46.

Analyst Ratings

BofA Securities upgraded Paychex Inc. (NASDAQ: PAYX) to a a Neutral rating in its most recent analyst report. Previously, the stock was rated as an Underperform. The consensus rating for Paychex Inc. (PAYX) among analysts is Hold. According to current brokerage recommendations, 1 brokerage firm advise that investors sell PAYX, while 16 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 3 others rate it as a “buy”.

What is PAYX’s price target for the next 12 months?

Analysts predict a range of price targets between $110.00 and $150.00, with a median target of $130.00. Taking a look at these predictions, the average price target given by analysts for Paychex Inc. (PAYX) stock is $128.16.

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