Paychex, Inc. $PAYX Shares Bought by Teacher Retirement System of Texas

Key Points

• Teacher Retirement System of Texas increased its Paychex stake by 58.5%, buying 59,431 shares to hold 161,053 shares valued at about $18.07 million at the end of the quarter.
• Paychex beat quarterly expectations with EPS of $1.71 (vs. $1.67) and revenue of $1.81B (+19.9% YoY), and its board authorized a $1.0 billion share buyback (≈2.5% of shares outstanding).
• Analyst sentiment has turned cautious: several firms cut targets and MarketBeat reports an average rating of "Reduce" with a consensus price target of $106.38.

Teacher Retirement System of Texas lifted its holdings in shares of Paychex, Inc. (NASDAQ:PAYX - Free Report) by 58.5% in the 4th quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The firm owned 161,053 shares of the business services provider's stock after buying an additional 59,431 shares during the period. Teacher Retirement System of Texas' holdings in Paychex were worth $18,067,000 at the end of the most recent reporting period.

Other hedge funds and other institutional investors have also made changes to their positions in the company. Vermillion & White Wealth Management Group LLC acquired a new position in shares of Paychex during the third quarter worth approximately $27,000. Stance Capital LLC acquired a new position in shares of Paychex during the third quarter worth approximately $31,000. MMA Asset Management LLC acquired a new position in shares of Paychex during the third quarter worth approximately $32,000. Board of the Pension Protection Fund acquired a new position in shares of Paychex during the fourth quarter worth approximately $34,000. Finally, Westfuller Advisors LLC acquired a new position in shares of Paychex during the third quarter worth approximately $35,000. 83.47% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several brokerages have recently issued reports on PAYX. Jefferies Financial Group reduced their price objective on Paychex from $110.00 to $105.00 and set a "hold" rating for the company in a research report on Thursday, March 26th. Stephens reduced their price objective on Paychex from $125.00 to $105.00 and set an "equal weight" rating for the company in a research report on Thursday, March 26th. Citigroup reduced their price objective on Paychex from $120.00 to $99.00 and set a "neutral" rating for the company in a research report on Thursday, March 26th. Argus upgraded Paychex to a "strong-buy" rating in a research report on Friday, March 27th. Finally, Wells Fargo & Company cut their target price on Paychex from $116.00 to $95.00 and set an "underweight" rating for the company in a research report on Thursday, March 26th. One investment analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, twelve have assigned a Hold rating and four have assigned a Sell rating to the company's stock. According to data from MarketBeat, Paychex presently has an average rating of "Reduce" and a consensus target price of $106.38.

Paychex Stock Performance

PAYX opened at $89.82 on Friday. The company has a market capitalization of $32.18 billion, a price-to-earnings ratio of 19.78 and a beta of 0.88. The company has a debt-to-equity ratio of 1.13, a current ratio of 1.26 and a quick ratio of 1.26. Paychex, Inc. has a 1-year low of $85.45 and a 1-year high of $161.24. The business has a 50 day moving average price of $92.40 and a two-hundred day moving average price of $105.61.

Paychex (NASDAQ:PAYX - Get Free Report) last released its earnings results on Wednesday, March 25th. The business services provider reported $1.71 earnings per share for the quarter, topping analysts' consensus estimates of $1.67 by $0.04. The firm had revenue of $1.81 billion during the quarter, compared to the consensus estimate of $1.78 billion. Paychex had a return on equity of 48.52% and a net margin of 25.84%.The firm's revenue for the quarter was up 19.9% compared to the same quarter last year. During the same period in the prior year, the firm posted $1.49 earnings per share. Research analysts predict that Paychex, Inc. will post 5.5 EPS for the current fiscal year.

Paychex declared that its board has initiated a stock buyback plan on Friday, January 16th that authorizes the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization authorizes the business services provider to reacquire up to 2.5% of its shares through open market purchases. Shares repurchase plans are usually a sign that the company's board believes its shares are undervalued.

Paychex Profile

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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