Paycom Q4 Earnings Beat Expectations with Significant Shareholder Returns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy PAYC?
Source: seekingalpha
- Earnings Highlights: Paycom's Q4 non-GAAP EPS of $2.45 aligns with market expectations, while revenue reached $544.3 million, reflecting a 10.2% year-over-year growth and exceeding forecasts by $1.51 million, indicating strong market performance.
- Adjusted EBITDA Growth: The adjusted EBITDA of $236.3 million represents a 9.9% increase from $214.9 million in the same period last year, showcasing the company's ongoing improvements in cost control and operational efficiency, thereby enhancing profitability.
- Cash Flow and Shareholder Returns: As of December 31, 2025, cash and cash equivalents stood at $370 million, down from $402 million a year earlier; however, the company paid $20.6 million in cash dividends and repurchased 554,226 shares for a total of $108.8 million, demonstrating a strong commitment to shareholder returns.
- Debt-Free Status: Paycom reported zero total debt as of December 31, 2025, maintaining a healthy financial position that provides ample flexibility for future investments and expansions, further bolstering market confidence.
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Analyst Views on PAYC
Wall Street analysts forecast PAYC stock price to rise
14 Analyst Rating
3 Buy
11 Hold
0 Sell
Hold
Current: 119.760
Low
165.00
Averages
201.82
High
245.00
Current: 119.760
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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- Holding Proportion Change: Following this purchase, Paycom accounts for 2.9% of Reinhart Partners' reportable assets, highlighting its significance in the investment portfolio, even as overall market performance remains weak.
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- Investor Considerations: While Paycom faces challenges, Reinhart's stake increase may suggest confidence in a potential rebound, prompting investors to carefully assess the risks and opportunities in the context of rapid AI development.
See More
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- Asset Allocation: This acquisition positions Paycom at 2.9% of Reinhart's assets under management, yet it remains outside the top five holdings, highlighting its relative standing within the investment portfolio.
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- Enhanced User Experience: IWant significantly improves the overall workforce experience by streamlining processes and providing clearer access to information, facilitating smoother communication between HR and employees while empowering them with self-service capabilities.
- Industry Recognition: IWant has been recognized as a Top HR Product of 2025 by HR Executive, further solidifying its leadership position in the industry and its profound impact on clients.
See More
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- Sales Growth: The company achieved quarterly sales of $544.3 million, exceeding the analyst estimate of $543.009 million, demonstrating strong competitive positioning and customer demand.
- Cautious Outlook: Paycom forecasts FY2026 sales between $2.175 billion and $2.195 billion, falling short of market expectations of $2.228 billion, which may impact investor confidence.
- Analyst Target Adjustments: BTIG analyst lowered Paycom's price target from $195 to $140, while Mizuho analyst reduced it from $180 to $120, reflecting a cautious outlook on the company's future performance.
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