Paychex (NASDAQ:PAYX) Releases Quarterly Earnings Results

Key Points

• Paychex reported a quarterly earnings per share (EPS) of $1.22, exceeding the consensus estimate of $1.20, and achieving a revenue of $1.54 billion for the quarter, representing a 16.8% year-over-year increase.
• The company's stock fell by 4.2% to $123.15 following the earnings announcement, with ongoing analyst ratings suggesting a mixed outlook and target price adjustments.
• Paychex declared a quarterly dividend of $1.08, yielding 3.5%, but has a high dividend payout ratio of 94.53%.

Paychex (NASDAQ:PAYX - Get Free Report) announced its quarterly earnings results on Tuesday. The business services provider reported $1.22 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.20 by $0.02, Briefing.com reports. Paychex had a return on equity of 45.01% and a net margin of 29.75%.The company had revenue of $1.54 billion during the quarter, compared to the consensus estimate of $1.54 billion. During the same period in the prior year, the company earned $1.16 earnings per share. The company's revenue for the quarter was up 16.8% compared to the same quarter last year. Paychex updated its FY 2026 guidance to 5.428-5.528 EPS.

Paychex Stock Down 4.2%

PAYX stock traded down $5.38 during mid-day trading on Tuesday, reaching $123.15. The company had a trading volume of 2,431,357 shares, compared to its average volume of 2,239,605. The company has a debt-to-equity ratio of 1.10, a current ratio of 1.28 and a quick ratio of 1.28. The stock has a 50 day simple moving average of $137.37 and a two-hundred day simple moving average of $144.99. The company has a market capitalization of $44.29 billion, a price-to-earnings ratio of 27.18, a PEG ratio of 2.94 and a beta of 0.91. Paychex has a 52 week low of $119.02 and a 52 week high of $161.24.

Paychex Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Friday, August 29th. Shareholders of record on Monday, July 21st were paid a $1.08 dividend. This represents a $4.32 dividend on an annualized basis and a yield of 3.5%. The ex-dividend date was Monday, July 21st. Paychex's dividend payout ratio (DPR) is currently 94.53%.

Insider Buying and Selling

In other Paychex news, CEO John B. Gibson sold 12,370 shares of the firm's stock in a transaction that occurred on Wednesday, July 16th. The stock was sold at an average price of $141.92, for a total value of $1,755,550.40. Following the completion of the transaction, the chief executive officer directly owned 81,755 shares in the company, valued at $11,602,669.60. This trade represents a 13.14% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, Chairman Martin Mucci sold 97,526 shares of the firm's stock in a transaction that occurred on Thursday, July 10th. The shares were sold at an average price of $145.17, for a total value of $14,157,849.42. Following the completion of the transaction, the chairman owned 446,917 shares of the company's stock, valued at approximately $64,878,940.89. This represents a 17.91% decrease in their ownership of the stock. The disclosure for this sale can be found here. 0.80% of the stock is owned by company insiders.

Institutional Trading of Paychex

A number of hedge funds have recently made changes to their positions in PAYX. Brighton Jones LLC lifted its position in shares of Paychex by 26.3% in the fourth quarter. Brighton Jones LLC now owns 5,710 shares of the business services provider's stock valued at $801,000 after buying an additional 1,190 shares during the last quarter. Bison Wealth LLC lifted its position in shares of Paychex by 3.0% in the fourth quarter. Bison Wealth LLC now owns 4,035 shares of the business services provider's stock valued at $566,000 after buying an additional 117 shares during the last quarter. Woodline Partners LP acquired a new stake in shares of Paychex in the first quarter valued at approximately $3,333,000. NewEdge Advisors LLC lifted its position in shares of Paychex by 3.2% in the second quarter. NewEdge Advisors LLC now owns 41,081 shares of the business services provider's stock valued at $5,976,000 after buying an additional 1,290 shares during the last quarter. Finally, Sei Investments Co. lifted its position in shares of Paychex by 47.1% in the second quarter. Sei Investments Co. now owns 156,680 shares of the business services provider's stock valued at $22,790,000 after buying an additional 50,169 shares during the last quarter. 83.47% of the stock is owned by institutional investors and hedge funds.

Analysts Set New Price Targets

Several brokerages have issued reports on PAYX. Wolfe Research lowered their price target on Paychex from $145.00 to $140.00 and set an "underperform" rating for the company in a report on Friday. BMO Capital Markets lowered their price target on Paychex from $160.00 to $143.00 and set a "market perform" rating for the company in a report on Wednesday, September 24th. Royal Bank Of Canada set a $165.00 price target on Paychex and gave the stock a "sector perform" rating in a report on Tuesday, June 24th. Citigroup lowered their price target on Paychex from $158.00 to $148.00 and set a "neutral" rating for the company in a report on Thursday, August 21st. Finally, Stifel Nicolaus decreased their price objective on Paychex from $152.00 to $142.00 and set a "hold" rating for the company in a report on Monday, September 22nd. Ten investment analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat.com, Paychex currently has a consensus rating of "Reduce" and an average target price of $145.91.

Paychex Company Profile

Paychex, Inc, together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing.

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