Paychex, Inc. (NASDAQ:PAYX) Receives Average Recommendation of "Hold" from Analysts

Key Points

• Analysts maintain a “Hold” consensus on Paychex, with 10 hold, four sell, two buy, and one strong-buy ratings. The average 12-month price target is $111, below the reported share price of $121.71.
• Paychex exceeded quarterly expectations with $1.32 in adjusted earnings per share and $1.61 billion in revenue, while revenue increased 12.5% year over year. Analysts forecast approximately $5.96 EPS for the current year.
• The company paid a quarterly dividend of $1.19 per share, equivalent to $4.76 annually and a 3.9% yield; its dividend payout ratio was high at 97.34%.

Paychex, Inc. (NASDAQ:PAYX - Get Free Report) has earned an average recommendation of "Hold" from the seventeen research firms that are presently covering the company, MarketBeat Ratings reports. Four research analysts have rated the stock with a sell recommendation, ten have given a hold recommendation, two have assigned a buy recommendation and one has issued a strong buy recommendation on the company. The average twelve-month price objective among analysts that have issued ratings on the stock in the last year is $111.00.

PAYX has been the subject of several analyst reports. Weiss Ratings raised shares of Paychex from a "hold (c-)" rating to a "hold (c)" rating in a report on Monday, July 20th. TD Cowen boosted their target price on Paychex from $94.00 to $98.00 and gave the stock a "hold" rating in a research report on Monday, June 8th. Jefferies Financial Group increased their target price on Paychex from $105.00 to $120.00 and gave the stock a "hold" rating in a research note on Wednesday, August 12th. JPMorgan Chase & Co. raised their price target on Paychex from $100.00 to $105.00 and gave the company an "underweight" rating in a report on Thursday, June 25th. Finally, Stephens started coverage on Paychex in a report on Friday. They set an "equal weight" rating and a $132.00 price objective on the stock.

Paychex Price Performance

Paychex stock opened at $121.71 on Friday. Paychex has a 12 month low of $85.45 and a 12 month high of $138.19. The company has a debt-to-equity ratio of 1.22, a current ratio of 1.26 and a quick ratio of 1.26. The business has a 50 day simple moving average of $116.50 and a 200-day simple moving average of $101.96. The stock has a market capitalization of $43.29 billion, a PE ratio of 24.89, a price-to-earnings-growth ratio of 2.55 and a beta of 0.82.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its quarterly earnings data on Wednesday, June 24th. The business services provider reported $1.32 earnings per share for the quarter, beating analysts' consensus estimates of $1.31 by $0.01. The firm had revenue of $1.61 billion for the quarter, compared to analyst estimates of $1.60 billion. Paychex had a net margin of 27.03% and a return on equity of 50.90%. Paychex's quarterly revenue was up 12.5% on a year-over-year basis. During the same period last year, the firm posted $1.19 EPS. Paychex has set its FY 2027 guidance at 5.900-6.010 EPS. Equities analysts predict that Paychex will post 5.96 earnings per share for the current year.

Paychex Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Friday, August 28th. Stockholders of record on Tuesday, July 28th were paid a dividend of $1.19 per share. The ex-dividend date of this dividend was Tuesday, July 28th. This represents a $4.76 dividend on an annualized basis and a dividend yield of 3.9%. Paychex's dividend payout ratio is 97.34%.

Insider Transactions at Paychex

In other news, CFO Robert Schrader sold 2,600 shares of the stock in a transaction dated Monday, July 20th. The shares were sold at an average price of $115.09, for a total value of $299,234.00. Following the completion of the transaction, the chief financial officer owned 18,547 shares in the company, valued at $2,134,574.23. This trade represents a 12.29% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Joseph Tucci sold 3,907 shares of the business's stock in a transaction dated Friday, June 26th. The stock was sold at an average price of $98.25, for a total transaction of $383,862.75. Following the sale, the director directly owned 67,364 shares in the company, valued at approximately $6,618,513. This represents a 5.48% decrease in their position. The SEC filing for this sale provides additional information. Company insiders own 0.80% of the company's stock.

Institutional Investors Weigh In On Paychex

A number of institutional investors and hedge funds have recently modified their holdings of PAYX. 44 Wealth Management LLC grew its holdings in Paychex by 2.7% in the second quarter. 44 Wealth Management LLC now owns 3,290 shares of the business services provider's stock valued at $479,000 after purchasing an additional 86 shares during the last quarter. Smartleaf Asset Management LLC boosted its position in shares of Paychex by 3.5% in the 2nd quarter. Smartleaf Asset Management LLC now owns 2,645 shares of the business services provider's stock worth $381,000 after buying an additional 89 shares in the last quarter. Parkside Financial Bank & Trust boosted its position in shares of Paychex by 6.3% in the 2nd quarter. Parkside Financial Bank & Trust now owns 1,519 shares of the business services provider's stock worth $149,000 after buying an additional 90 shares in the last quarter. Prosperity Consulting Group LLC grew its stake in Paychex by 1.4% in the 3rd quarter. Prosperity Consulting Group LLC now owns 7,270 shares of the business services provider's stock valued at $922,000 after acquiring an additional 100 shares during the last quarter. Finally, SBI Securities Co. Ltd. grew its stake in Paychex by 14.5% in the 4th quarter. SBI Securities Co. Ltd. now owns 798 shares of the business services provider's stock valued at $90,000 after acquiring an additional 101 shares during the last quarter. Institutional investors and hedge funds own 83.47% of the company's stock.

About Paychex

Paychex, Inc, founded in 1971 by B. Thomas "Tom" Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company's core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers' compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.

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