Latest Ratios: P/E Ratio 23.1x · EV/EBITDA 14.9x · ROE 44.8%. (1997–2026 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $41.6B | $34.9B | $57.2B | $43.5B | $38.0B | $45.0B | $36.6B | $26.1B | $31.0B | $23.7B | $21.5B |
| Enterprise Value | $45.1B | $38.4B | $60.6B | $42.9B | $37.7B | $45.5B | $36.6B | $26.1B | $31.2B | $23.3B | $21.3B |
| P/E Ratio → | 23.11 | 19.83 | 34.48 | 25.73 | 24.40 | 32.25 | 33.38 | 23.78 | 30.00 | 25.42 | 26.32 |
| P/S Ratio | 6.30 | 5.36 | 10.26 | 8.24 | 7.59 | 9.75 | 9.03 | 6.46 | 8.23 | 7.01 | 6.82 |
| P/B Ratio | 11.28 | 9.35 | 13.85 | 11.45 | 10.88 | 14.57 | 12.42 | 9.38 | 11.85 | 11.71 | 10.98 |
| P/FCF | 20.64 | 15.04 | 32.49 | 25.06 | 24.43 | 32.75 | 31.97 | 19.86 | 26.63 | 21.12 | 24.80 |
| P/OCF | 16.28 | 13.66 | 29.30 | 22.93 | 22.37 | 29.87 | 29.06 | 18.11 | 24.07 | 18.57 | 22.36 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 5.90 | 10.87 | 8.13 | 7.52 | 9.86 | 9.01 | 6.46 | 8.26 | 6.91 | 6.76 |
| EV / EBITDA | 14.89 | 13.00 | 25.05 | 18.25 | 17.04 | 22.38 | 22.12 | 15.62 | 20.08 | 16.38 | 15.58 |
| EV / EBIT | 17.97 | 14.93 | 26.55 | 19.03 | 18.06 | 24.43 | 24.87 | 17.86 | 22.65 | 18.08 | 16.88 |
| EV / FCF | — | 16.54 | 34.42 | 24.71 | 24.20 | 33.12 | 31.91 | 19.85 | 26.74 | 20.80 | 24.58 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 74.3% | 74.3% | 72.4% | 72.0% | 71.0% | 70.6% | 68.7% | 68.3% | 68.8% | 69.9% | 70.8% |
| Operating Margin | 38.6% | 38.6% | 39.6% | 41.2% | 40.6% | 39.9% | 36.0% | 36.1% | 36.3% | 38.1% | 39.3% |
| Net Profit Margin | 27.0% | 27.0% | 29.7% | 32.0% | 31.1% | 30.2% | 27.1% | 27.2% | 27.4% | 27.6% | 25.9% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 44.8% | 44.8% | 41.8% | 46.3% | 47.3% | 46.2% | 38.3% | 40.7% | 44.5% | 46.9% | 42.3% |
| ROA | 10.8% | 10.8% | 12.3% | 16.2% | 15.4% | 14.8% | 12.3% | 12.7% | 12.8% | 13.1% | 12.3% |
| ROIC | 25.5% | 25.5% | 30.9% | 51.5% | 45.3% | 42.6% | 38.8% | 39.6% | 46.5% | 56.2% | 52.4% |
| ROCE | 26.5% | 26.5% | 30.1% | 44.3% | 44.6% | 42.5% | 34.7% | 36.7% | 45.7% | 60.2% | 59.3% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 1.24 | 1.24 | 1.22 | 0.23 | 0.25 | 0.29 | 0.31 | 0.32 | 0.31 | — | — |
| Debt / EBITDA | 1.57 | 1.57 | 2.08 | 0.37 | 0.39 | 0.43 | 0.56 | 0.54 | 0.52 | — | — |
| Net Debt / Equity | — | 0.93 | 0.82 | -0.16 | -0.10 | 0.17 | -0.02 | -0.00 | 0.05 | -0.18 | -0.09 |
| Net Debt / EBITDA | 1.18 | 1.18 | 1.40 | -0.26 | -0.16 | 0.25 | -0.04 | -0.00 | 0.09 | -0.25 | -0.14 |
| Debt / FCF | — | 1.50 | 1.93 | -0.35 | -0.23 | 0.37 | -0.06 | -0.00 | 0.12 | -0.32 | -0.21 |
| Interest Coverage | 9.55 | 9.55 | 21.64 | 60.46 | 56.81 | 50.85 | 41.06 | 37.64 | 78.22 | 331.15 | 504.64 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.26 | 1.26 | 1.28 | 1.37 | 1.30 | 1.25 | 1.25 | 1.23 | 1.17 | 1.09 | 1.12 |
| Quick Ratio | 1.26 | 1.26 | 1.28 | 1.37 | 1.30 | 1.25 | 1.25 | 1.23 | 1.17 | 1.09 | 1.12 |
| Cash Ratio | 0.17 | 0.17 | 0.24 | 0.28 | 0.27 | 0.23 | 0.21 | 0.21 | 0.15 | 0.08 | 0.07 |
| Asset Turnover | — | 0.40 | 0.34 | 0.51 | 0.47 | 0.48 | 0.44 | 0.47 | 0.43 | 0.45 | 0.46 |
| Inventory Turnover | — | — | — | — | — | — | — | — | — | — | — |
| Days Sales Outstanding | — | 123.75 | 129.38 | 112.39 | 103.97 | 104.33 | 94.79 | 71.39 | 82.65 | 56.64 | 62.94 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 3.8% | 4.6% | 2.5% | 3.0% | 3.1% | 2.2% | 2.5% | 3.4% | 2.7% | 3.1% | 3.1% |
| Payout Ratio | 90.3% | 90.3% | 87.4% | 77.8% | 75.5% | 71.8% | 82.8% | 81.0% | 79.9% | 79.2% | 81.0% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 4.3% | 5.0% | 2.9% | 3.9% | 4.1% | 3.1% | 3.0% | 4.2% | 3.3% | 3.9% | 3.8% |
| FCF Yield | 4.8% | 6.7% | 3.1% | 4.0% | 4.1% | 3.1% | 3.1% | 5.0% | 3.8% | 4.7% | 4.0% |
| Buyback Yield | 1.5% | 1.8% | 0.2% | 0.4% | 0.0% | 0.3% | 0.4% | 0.7% | 0.2% | 0.6% | 0.8% |
| Total Shareholder Yield | 5.2% | 6.3% | 2.7% | 3.4% | 3.1% | 2.5% | 2.9% | 4.1% | 2.8% | 3.7% | 3.9% |
| Shares Outstanding | — | $360M | $362M | $362M | $362M | $363M | $362M | $361M | $362M | $362M | $363M |
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying PAYX stock.
Paychex, Inc.'s current P/E ratio is 23.1x. The historical average is 33.0x. This places it at the 20th percentile of its historical range.
Paychex, Inc.'s current EV/EBITDA is 14.9x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 20.9x.
Paychex, Inc.'s return on equity (ROE) is 44.8%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 37.7%.
Based on historical data, Paychex, Inc. is trading at a P/E of 23.1x. This is at the 20th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Paychex, Inc.'s current dividend yield is 3.77% with a payout ratio of 90.3%.
Paychex, Inc. has 74.3% gross margin and 38.6% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Paychex, Inc.'s Debt/EBITDA ratio is 1.6x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
Leverage & Rate Sensitivity
Metrics are mathematically derived from official filings.
Float-Inflated P/E Distorts Core Earnings
Paychex's forward P/E of 18.49, based on current valuation multiples, appears discounted relative to ADP's 24.03, yet this comparison may overlook the substantial contribution of interest on client funds to reported earnings, a non-operational component sensitive to rate shifts.
The valuation discount to peer ADP could suggest a growth or quality gap, but it is largely a function of Paychex's unique float income, which inflates the net income used in the P/E calculation. In a rising rate environment, this tailwind artificially lowers the P/E multiple, making the stock appear cheaper than its core operations warrant. Consequently, the EV/EBITDA multiple of 13.40 provides a cleaner view, stripping out the impact of leverage and the interest income, and still shows a modest discount to ADP's 23.25, likely reflecting Paychex's heavier weighting toward the lower-growth SMB segment.
Gross Margin Stability Masked by SBC & Float
As reported in financial statements, Paychex's gross margin remained stable near 74% in 2027Q1, but underlying profitability is distorted by non-cash stock-based compensation charges exceeding $52 million in Q2 2026 and significant, rate-sensitive interest income on client funds.
The impressive gross margin demonstrates the scalability of the platform and high incremental profitability on new clients. However, the volatility in operating and net margins is driven by factors outside core operations, specifically the level of stock-based compensation and the yield earned on client payroll floats. Investors should therefore focus on adjusted operating metrics that strip out the interest income to gauge the true pricing power and cost efficiency of the payroll and HR services business, as the reported net margin of 26.4% in 2027Q1 includes this non-operating benefit.
Post-Acquisition ROIC Compression
Paychex's ROIC has fallen sharply from 14.8% in 2025Q3 to just 6.2% in 2027Q1, according to provided ratio data, indicating a severe deterioration in capital efficiency that followed a transformative acquisition and balance sheet levering event.
This steep decline is not driven by operational margin erosion, as gross margins held, but by a massive expansion in the invested capital base, primarily through goodwill and debt. The company is now generating far less return on each dollar of capital employed compared to its pre-acquisition, equity-financed state. This compression warrants close monitoring to determine if it is a temporary integration phase or signals a permanent reduction in the business's compounding ability; a failure to reverse this trend would challenge the long-term investment thesis.
Dramatic Shift to Debt-Financed Model
As of 2027Q1, Paychex's debt-to-equity ratio of 1.25 represents a fundamental shift from the 0.23 level seen in 2024Q4, according to balance sheet data, while interest coverage has contracted from over 59x to 9.5x, heightening sensitivity to refinancing costs.
The leverage surge has reset the company's risk profile from a fortress-like, net-cash position to one with material debt service obligations. While the current interest coverage ratio of 9.51 remains adequate, the trajectory is the primary concern; it leaves minimal cushion if earnings growth decelerates further or if interest rates rise upon refinancing. This newly assumed financial risk contrasts sharply with the company's historical profile and may explain some of the valuation discount to peers with stronger balance sheets.
Misapplied P/E Ratio Obscures Core Value
The most commonly misapplied ratio for Paychex is its P/E of 20.77, as it blends core operational earnings with highly variable, non-operational interest income on client funds, which is directly tied to fluctuating short-term interest rates.
Analysts using the P/E ratio often compare it to technology or services peers without adjusting for the significant contribution of float income, which can be over 20% of pre-tax profit in certain quarters. This makes the P/E appear artificially stable or low, masking the cyclicality of earnings and misrepresenting the valuation of the core payroll and HR services business. A more appropriate metric would be a P/E ratio calculated using operating income, or an EV/EBITDA multiple, which focuses on the cash flow from core operations and is less distorted by the balance sheet structure and rate-dependent float.