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    Paycom (PAYC): Assessing Valuation After Mixed Q3 Results, CFO Share Sale and Revised Growth Outlook

    Simply Wall St·12/16/2025 10:23:29
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    Paycom Software (PAYC) is back in focus after a mixed third quarter, with earnings per share coming in a bit light even as revenue topped forecasts and management guided to slightly faster revenue growth ahead.

    See our latest analysis for Paycom Software.

    Those mixed Q3 numbers, combined with the recent CFO share sale, help explain why Paycom’s 3 month share price return is down sharply and its 1 year total shareholder return is also firmly negative. This suggests momentum has softened despite ongoing revenue growth.

    If Paycom’s reset has you rethinking your exposure to payroll and HR software, it could be a good moment to explore other high growth tech names through high growth tech and AI stocks.

    With the share price down nearly 30 percent over the past year, yet still growing revenue and trading at a sizable discount to analyst targets, is Paycom now quietly undervalued, or is the market already pricing in all its future growth?

    Most Popular Narrative Narrative: 22.4% Undervalued

    With Paycom last closing at $162.81 against a narrative fair value near $209.94, the story points to meaningful upside if its thesis plays out.

    Automation and AI driven product innovation, combined with Paycom's unified single database architecture, are driving salesforce productivity gains, increased client satisfaction, and higher client retention rates. These trends could strengthen long term net margins and earnings stability. Paycom's ability to activate the majority of its client base on new AI powered features with minimal training or friction reflects the industry shift toward automation and digital transformation in workforce management, supporting sustained new logo wins and topline revenue growth.

    Read the complete narrative.

    Curious how steady, mid range growth assumptions and rising margins can still justify a premium earnings multiple years from now? The narrative leans on disciplined reinvestment, durable profitability, and a bold view of what investors will pay for those future earnings. Want to see how those moving parts add up to that fair value target?

    Result: Fair Value of $209.94 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, widespread AI adoption and ongoing industry consolidation could compress Paycom’s pricing power, pressure margins, and weaken its competitive moat if differentiation fades.

    Find out about the key risks to this Paycom Software narrative.

    Build Your Own Paycom Software Narrative

    If you see Paycom's story differently or want to ground your own view in the numbers, you can build a custom narrative in minutes: Do it your way.

    A great starting point for your Paycom Software research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

    Ready for your next investing edge?

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.