Zacks Research Predicts Paychex's Q2 Earnings (NASDAQ:PAYX)

Key Points

• Zacks Research lowered Paychex’s Q2 fiscal 2027 EPS estimate to $1.31 from $1.36, while raising its full-year fiscal 2027 and fiscal 2028 forecasts modestly to $5.94 and $6.25, respectively.
• Paychex recently reported quarterly EPS of $1.34, beating estimates by $0.02, with revenue of $1.63 billion, up 5.9% year over year. The company provided fiscal 2027 EPS guidance of $5.896 to $6.006.
• Analyst sentiment remains cautious, with a consensus “Hold” rating and average price target of $127.59; shares opened at $101.55, while the company’s $1.19 quarterly dividend implies a 4.7% yield.

Paychex, Inc. (NASDAQ:PAYX - Free Report) - Analysts at Zacks Research dropped their Q2 2027 earnings per share (EPS) estimates for Paychex in a report issued on Wednesday, October 7th. Zacks Research analyst Team now anticipates that the business services provider will post earnings of $1.31 per share for the quarter, down from their previous forecast of $1.36. The consensus estimate for Paychex's current full-year earnings is $5.96 per share. Zacks Research also issued estimates for Paychex's Q3 2027 earnings at $1.84 EPS, FY2027 earnings at $5.94 EPS, Q1 2028 earnings at $1.41 EPS, Q2 2028 earnings at $1.42 EPS, Q3 2028 earnings at $1.71 EPS, Q4 2028 earnings at $1.71 EPS, FY2028 earnings at $6.25 EPS, Q1 2029 earnings at $1.55 EPS and FY2029 earnings at $6.67 EPS.

Paychex (NASDAQ:PAYX - Get Free Report) last issued its earnings results on Wednesday, September 23rd. The business services provider reported $1.34 EPS for the quarter, topping the consensus estimate of $1.32 by $0.02. Paychex had a return on equity of 52.78% and a net margin of 27.35%.The company had revenue of $1.63 billion during the quarter, compared to analyst estimates of $1.63 billion. During the same quarter last year, the firm earned $1.22 EPS. The business's revenue was up 5.9% on a year-over-year basis. Paychex has set its FY 2027 guidance at 5.896-6.006 EPS.

A number of other research analysts also recently issued reports on PAYX. Cantor Fitzgerald reduced their price target on shares of Paychex from $112.00 to $96.00 and set an "underweight" rating on the stock in a research report on Monday, September 28th. Raymond James Financial raised shares of Paychex from a "market perform" rating to an "outperform" rating and set a $210.00 target price on the stock in a report on Thursday, July 16th. JPMorgan Chase & Co. raised Paychex from an "underweight" rating to a "neutral" rating and upped their target price for the company from $105.00 to $115.00 in a report on Thursday, September 24th. TD Cowen reduced their price objective on Paychex from $117.00 to $105.00 and set a "hold" rating for the company in a research report on Friday, September 25th. Finally, Bank of America dropped their target price on Paychex from $450.00 to $225.00 in a research report on Wednesday, July 15th. One equities research analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, thirteen have assigned a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat, the company has an average rating of "Hold" and an average price target of $127.59.

Paychex Stock Performance

Paychex stock opened at $101.55 on Thursday. The company has a debt-to-equity ratio of 1.23, a current ratio of 1.28 and a quick ratio of 1.28. Paychex has a 12 month low of $85.45 and a 12 month high of $129.24. The company has a fifty day moving average price of $116.13 and a two-hundred day moving average price of $104.53. The company has a market cap of $36.15 billion, a PE ratio of 20.15, a P/E/G ratio of 2.12 and a beta of 0.86.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in PAYX. Tompkins Financial Corp raised its holdings in Paychex by 2.6% during the third quarter. Tompkins Financial Corp now owns 14,099 shares of the business services provider's stock worth $1,389,000 after purchasing an additional 359 shares in the last quarter. Rockland Trust Co. boosted its stake in Paychex by 6.3% during the third quarter. Rockland Trust Co. now owns 13,293 shares of the business services provider's stock valued at $1,309,000 after buying an additional 792 shares in the last quarter. State Street Corp raised its position in Paychex by 2.6% in the second quarter. State Street Corp now owns 14,411,341 shares of the business services provider's stock worth $1,417,067,000 after acquiring an additional 361,713 shares in the last quarter. Talon Private Wealth LLC bought a new position in shares of Paychex during the 2nd quarter valued at about $220,000. Finally, Rench Wealth Management Inc. raised its holdings in shares of Paychex by 1.2% in the 2nd quarter. Rench Wealth Management Inc. now owns 56,948 shares of the business services provider's stock worth $5,600,000 after purchasing an additional 650 shares in the last quarter. 83.47% of the stock is currently owned by institutional investors.

Insider Activity at Paychex

In related news, CFO Robert Schrader sold 2,600 shares of the company's 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 sale, the chief financial officer owned 18,547 shares of the company's stock, valued at $2,134,574.23. This represents a 12.29% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Company insiders own 0.60% of the company's stock.

Paychex Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Friday, August 28th. Stockholders of record on Tuesday, July 28th were paid a $1.19 dividend. The ex-dividend date of this dividend was Tuesday, July 28th. This represents a $4.76 annualized dividend and a dividend yield of 4.7%. Paychex's dividend payout ratio is presently 94.44%.

Key Stories Impacting Paychex

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: NelsonHall named Paychex Flex and Paycor “Leaders” in its 2026 workforce-management technology evaluation. The recognition highlights Paychex’s AI-powered workforce optimization strategy, continued platform investment, and ability to address both current and future customer needs. Paychex Honored as a Workforce Management Technology Leader by NelsonHall
• Positive Sentiment: Zacks Research raised its Paychex EPS forecasts for fiscal 2027 to $5.94 from $5.92 and fiscal 2028 to $6.25 from $6.22. It also increased estimates for third-quarter fiscal 2027, first-quarter fiscal 2028, third-quarter fiscal 2028, and fourth-quarter fiscal 2028, suggesting modest confidence in longer-term earnings growth.
• Neutral Sentiment: The analyst revisions were mixed rather than uniformly bullish. Zacks lowered estimates for second-quarter fiscal 2027 to $1.31 from $1.36, second-quarter fiscal 2028 to $1.42 from $1.45, and first-quarter fiscal 2029 to $1.55 from $1.59. Its fiscal 2029 forecast also declined slightly to $6.67 from $6.69. The current full-year consensus remains $5.96 per share.
• Negative Sentiment: A commentary piece raised concerns about Paychex’s attractive dividend, pointing to first-quarter cash flow and two underappreciated risks that could affect the company’s ability to support its payout. Such concerns may weigh on income-focused investors despite the stock’s strong earnings history. The Hidden Risks Behind Paychex’s Attractive Dividend

About Paychex

Paychex, Inc NASDAQ: PAYX provides payroll, human resources and employee benefits solutions for businesses of varying sizes. Its services are designed to help employers manage workforce administration, compliance and employee-related processes through integrated software and professional support.

The company's offerings include payroll processing, time and attendance tracking, human resources administration, recruiting and onboarding tools, benefits administration, retirement services, workers' compensation and business insurance solutions.

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