Upside case
Bull case
$164+67.4%
PAYX would need investors to value it at roughly 30x earnings — about 12x more generous than today's 18x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated Jun 18, 2026
Paychex, Inc. (PAYX) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
30
analysts
5 bullish · 6 bearish · 30 covering PAYX
Strong Buy
0
Buy
5
Hold
19
Sell
6
Strong Sell
0
Consensus Target
$106
+7.5% vs today
Scenario Range
$79 – $164
Model bear to bull value window
Coverage
30
Published analyst ratings
Valuation Context
17.9x
Forward P/E · Market cap $35.3B
PAYX price targets
Three scenarios for where PAYX stock could go
Current
~$98
Confidence
62 / 100
Updated
Jun 18, 2026
Where we are now
Current · $98
Bear
$79
Base
$125
Bull
$164
Market caseClosest to today
Base case
$125+27.1%
At 23x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$79-20.0%
If investor confidence fades or macro conditions deteriorate, a 4x multiple contraction could push PAYX down roughly 20% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Paychex, Inc.
PAYX · NASDAQIndustrialsStaffing & Employment ServicesMay year-end
Paychex is a human capital management company that provides payroll, HR, benefits, and insurance services primarily to small and medium-sized businesses. It generates revenue through recurring service fees for payroll processing (~60% of revenue), HR solutions (~25%), and insurance services (~15%), with most contracts being annual subscriptions. Its competitive advantage lies in its deep regulatory expertise and integrated platform that creates high switching costs for clients who rely on its compliance capabilities.
Market Cap
$35.3B
Revenue TTM
$6.0B
Net Income TTM
$1.6B
Net Margin
26.4%
PAYX Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
83%Exceptional
12 quarters tracked
Revenue Beat Rate
75%Exceptional
vs consensus estimates
Avg EPS Surprise
+1.2%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Last 4 Quarters
EPS beats: 4 of 4Q2 2025
EPS
$1.19/$1.19
Revenue
$1.4B/$1.4B
Q3 2025
EPS
$1.22/$1.20
Revenue
$1.5B/$1.5B
Q4 2025
EPS
$1.26/$1.23
Revenue
$1.6B/$1.6B
Q1 2026
EPS
$1.71/$1.67
Revenue
$1.8B/$1.8B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q2 2025 | $1.19/$1.19 | +0.0% | $1.4B/$1.4B | -1.1% |
| Q3 2025 | $1.22/$1.20 | +1.7% | $1.5B/$1.5B | +0.1% |
| Q4 2025 | $1.26/$1.23 | +2.4% | $1.6B/$1.6B | +0.3% |
| Q1 2026 | $1.71/$1.67 | +2.4% | $1.8B/$1.8B | +1.5% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$6.5B
+8.0% YoY
FY2
$6.9B
+5.6% YoY
EPS Outlook
FY1
$5.23
+18.4% YoY
FY2
$5.68
+8.6% YoY
Trailing FCF (TTM)$2.1B
FCF Margin: 34.1%
Next Earnings
June 24, 2026
Expected EPS
$1.32
Expected Revenue
$1.6B
PAYX beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
PAYX Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $5.4B
Product Mix
Latest annual revenue by segment or product family
Management Solutions
75.2%
+5.2% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
Segment breakdown not available for this company.
Management Solutions is the largest disclosed segment at 75.2% of FY 2025 revenue, up 5.2% YoY.
PAYX Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Expensive versus peers
Fair value est. $74 — implies -24.5% from today's price.
Premium to Fair Value
24.5%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
PAYX
21.4x
vs
S&P 500
24.4x
12% discount
vs Industrials Trailing P/E
PAYX
21.4x
vs
Industrials
25.6x
16% discount
vs PAYX 5Y Avg P/E
Today
21.4x
vs
5Y Average
30.0x
29% discount
Forward PE
17.9x
S&P 500
18.8x
-5%
Industrials
21.2x
-16%
5Y Avg
—
—
Trailing PE
21.4x
S&P 500
24.4x
-12%
Industrials
25.6x
-16%
5Y Avg
30.0x
-29%
PEG Ratio
2.51x
S&P 500
1.66x
+51%
Industrials
1.65x
+52%
5Y Avg
—
—
EV/EBITDA
16.0x
S&P 500
15.2x
+5%
Industrials
13.9x
+15%
5Y Avg
21.0x
-24%
Price/FCF
20.0x
S&P 500
20.7x
-3%
Industrials
20.0x
0%
5Y Avg
29.3x
-32%
Price/Sales
6.3x
S&P 500
3.1x
+105%
Industrials
1.6x
+305%
5Y Avg
9.0x
-29%
Dividend Yield
4.07%
S&P 500
1.91%
+113%
Industrials
1.21%
+235%
5Y Avg
2.67%
+53%
| Metric | PAYX | S&P 500 | Industrials | 5Y Avg PAYX |
|---|---|---|---|---|
| Forward PE | 17.9x | 18.8x | 21.2x-16% | — |
| Trailing PE | 21.4x | 24.4x-12% | 25.6x-16% | 30.0x-29% |
| PEG Ratio | 2.51x | 1.66x+51% | 1.65x+52% | — |
| EV/EBITDA | 16.0x | 15.2x | 13.9x+15% | 21.0x-24% |
| Price/FCF | 20.0x | 20.7x | 20.0x | 29.3x-32% |
| Price/Sales | 6.3x | 3.1x+105% | 1.6x+305% | 9.0x-29% |
| Dividend Yield | 4.07% | 1.91% | 1.21% | 2.67% |
PAYX trades above S&P 500 benchmarks on 2 of 6 measured multiples — is elevated on some multiples, but competitive on others — a mixed valuation picture.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolPAYX Financial Health
Verdict
Exceptional
PAYX generates $2.1B in free cash flow at a 34.1% margin — 30.9% ROIC signals a durable competitive advantage · returns 4.4% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$6.0B
Revenue Growth
TTM vs prior year
+12.4%
Gross Margin
Gross profit as a share of revenue
73.4%
Operating Margin
Operating income divided by revenue
37.1%
Net Margin
Net income divided by revenue
26.4%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$4.42
Free Cash Flow (TTM)
Cash generation after capex
$2.1B
FCF Margin
FCF as share of revenue — the primary cash quality signal
34.1%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
30.9%
ROA
Return on assets, trailing twelve months
9.7%
Cash & Equivalents
Liquid assets on the balance sheet
$1.6B
Net Debt
Total debt minus cash
$3.4B
Debt Serviceability
Net debt as a multiple of annual free cash flow
1.6× FCF
~1.6 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
41.1%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
4.4%
Dividend
4.1%
Buyback
0.3%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$105M
Dividend / Share
Annualized trailing dividend per share
$4.00
Payout Ratio
Share of earnings distributed as dividends
87.4%
Shares Outstanding
Declining as buybacks retire shares
359M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pagePAYX Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated June 18, 2026
High Risk
Valuation premium
Paychex stock trades at a 13% premium to its DCF intrinsic value of $87.43, suggesting overvaluation risk.
Medium
Competitive pressures
The company operates in a crowded human capital management space with intense competition from other providers.
Medium
Economic sensitivity
As a provider of payroll and HR services, Paychex is exposed to economic cycles affecting small to mid-sized businesses.
Lower
Operational risks
Dependence on online platforms and portals introduces potential cybersecurity and service disruption risks.
High Risk
Regulatory compliance
Payroll tax and compliance services expose the company to regulatory changes and enforcement risks.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why PAYX Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated June 18, 2026
Recurring Revenue Strength
Paychex benefits from strong recurring revenues, which provide stability and predictable cash flows.
High Margins
The company maintains high margins, reflecting efficient operations and profitability.
Dividend Growth
A recent 10.2% dividend increase underscores Paychex's financial strength and commitment to shareholder returns.
Diverse Platform Offerings
Paychex Flex, eServices, and other platforms provide comprehensive payroll, HR, and benefits solutions, enhancing customer retention.
Secure Online Portal
Paychex Oasis offers a secure and user-friendly portal for managing payroll, HR, and benefits, improving client satisfaction.
Bullish Analyst Coverage
Recent bullish theses highlight Paychex's potential, focusing on its financial resilience and growth prospects.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
PAYX Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$98.24
52W Range Position
19%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$85.45
+15.0% from the low
52-Week High
$152.84
-35.7% from the high
1 Month
+3.97%
3 Month
+8.38%
YTD
-9.5%
1 Year
-34.6%
3Y CAGR
-4.3%
5Y CAGR
-0.8%
10Y CAGR
+5.9%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
PAYX vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
17.9x
vs 12.5x median
+43% above peer median
Revenue Growth
+8.0%
vs +5.5% median
+44% above peer median
Net Margin
26.4%
vs 14.9% median
+77% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
PAY PAYX Paychex, Inc. | $35.3B | 17.9x | +8.0% | 26.4% | Hold | +7.5% |
ADP ADP Automatic Data Processing, Inc. | $87.9B | 19.7x | +5.3% | 20.1% | Hold | +11.5% |
PCT PCTY Paylocity Holding Corporation | $5.4B | 12.5x | +11.6% | 14.9% | Buy | +45.5% |
PAY PAYC Paycom Software, Inc. | $6.8B | 11.5x | +12.2% | 22.4% | Hold | +21.5% |
TNE TNET TriNet Group, Inc. | $2.1B | 10.0x | +4.5% | 3.2% | Hold | +65.6% |
NSP NSP Insperity, Inc. | $1.4B | 17.6x | +5.5% | -0.1% | Hold | +43.6% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
PAYX Dividend and Capital Return
PAYX returns 4.4% total yield, led by a 4.07% dividend, raised 15 consecutive years.
Dividend At RiskFCF Adequate
Total Shareholder Yield
4.4%
Dividend + buyback return per year
Buyback Yield
0.3%
Dividend Yield
4.07%
Payout Ratio
87.4%
How PAYX Splits Its Return
Div 4.07%
Dividend 4.07%Buybacks 0.3%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$4.00
Growth Streak
Consecutive years of dividend increases
15Y
3Y Div CAGR
11.7%
5Y Div CAGR
11.2%
Ex-Dividend Date
—
Payment Cadence
Quarterly
4 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$105M
Estimated Shares Retired
1M
Approx. Share Reduction
0.3%
Shares Outstanding
Current diluted share count from the screening snapshot
359M
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $2.27 | — | — | — |
| 2025 | $4.22 | +10.2% | 0.2% | 2.7% |
| 2024 | $3.83 | +10.7% | 0.4% | 3.4% |
| 2023 | $3.46 | +14.2% | 0.0% | 3.1% |
| 2022 | $3.03 | +16.5% | 0.3% | 2.5% |
FAQ
7 questionsPAYX Investor Questions
Common questions answered from live analyst data and company financials.
01Is Paychex, Inc. (PAYX) stock a buy or sell in 2026?
Paychex, Inc. (PAYX) is rated Hold by Wall Street analysts as of 2026. Of 30 analysts covering the stock, 5 rate it Buy or Strong Buy, 19 rate it Hold, and 6 rate it Sell or Strong Sell. The consensus 12-month price target is $106, implying +7.5% from the current price of $98. The bear case scenario is $79 and the bull case is $164.
02What is the PAYX stock price target for 2026?
The Wall Street consensus price target for PAYX is $106 based on 30 analyst estimates. The high-end target is $110 (+12.0% from today), and the low-end target is $98 (-0.2%). The base case model target is $125.
03Is Paychex, Inc. (PAYX) stock overvalued in 2026?
PAYX trades at 17.9x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals expensive versus peers. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Paychex, Inc. (PAYX) stock in 2026?
The primary risks for PAYX in 2026 are: (1) Valuation premium — Paychex stock trades at a 13% premium to its DCF intrinsic value of $87. (2) Regulatory compliance — Payroll tax and compliance services expose the company to regulatory changes and enforcement risks. (3) Competitive pressures — The company operates in a crowded human capital management space with intense competition from other providers. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Paychex, Inc.'s revenue and earnings forecast?
Analyst consensus estimates PAYX will report consensus revenue of $6.5B (+8.0% year-over-year) and EPS of $5.23 (+18.4% year-over-year) for the upcoming fiscal year. The following year, analysts project $6.9B in revenue.
06When does Paychex, Inc. (PAYX) report its next earnings?
Paychex, Inc. is expected to report its next earnings on approximately 2026-06-24. Consensus expects EPS of $1.32 and revenue of $1.6B. Over recent quarters, PAYX has beaten EPS estimates 83% of the time.
07How much free cash flow does Paychex, Inc. generate?
Paychex, Inc. (PAYX) generated $2.1B in free cash flow over the trailing twelve months — a free cash flow margin of 34.1%. PAYX returns capital to shareholders through dividends (4.1% yield) and share repurchases ($105M TTM).