Paychex (NASDAQ:PAYX) Shares Gap Down After Earnings Miss

Paychex, Inc. (NASDAQ:PAYX - Get Free Report)'s share price gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $152.25, but opened at $145.27. Paychex shares last traded at $138.65, with a volume of 945,157 shares traded.

The business services provider reported $1.19 earnings per share (EPS) for the quarter, meeting the consensus estimate of $1.19. Paychex had a net margin of 29.75% and a return on equity of 45.01%. The company had revenue of $1.43 billion during the quarter, compared to analysts' expectations of $1.38 billion. During the same period in the previous year, the company earned $1.12 EPS.

Paychex Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Thursday, May 29th. Stockholders of record on Monday, May 12th were paid a dividend of $1.08 per share. The ex-dividend date was Monday, May 12th. This is a boost from Paychex's previous quarterly dividend of $0.98. This represents a $4.32 annualized dividend and a dividend yield of 3.00%. Paychex's payout ratio is currently 90.00%.

Analysts Set New Price Targets

PAYX has been the subject of several research reports. Royal Bank Of Canada set a $165.00 price objective on shares of Paychex and gave the company a "sector perform" rating in a research note on Tuesday. Jefferies Financial Group set a $140.00 price objective on shares of Paychex and gave the company a "hold" rating in a research note on Thursday. Cfra Research raised shares of Paychex to a "hold" rating in a research note on Thursday, March 27th. Stifel Nicolaus lowered their price objective on shares of Paychex from $156.00 to $152.00 and set a "hold" rating for the company in a research note on Thursday. Finally, UBS Group lowered their price objective on shares of Paychex from $155.00 to $145.00 and set a "neutral" rating for the company in a research note on Thursday. One equities research analyst has rated the stock with a sell rating and nine have assigned a hold rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Hold" and an average target price of $149.11.

Insiders Place Their Bets

In other Paychex news, Director Joseph M. Velli sold 3,650 shares of the business's stock in a transaction dated Tuesday, April 15th. The stock was sold at an average price of $149.25, for a total transaction of $544,762.50. Following the transaction, the director now owns 78,455 shares in the company, valued at $11,709,408.75. The trade was a 4.45% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. 11.40% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of PAYX. Meeder Asset Management Inc. lifted its stake in shares of Paychex by 220.7% during the fourth quarter. Meeder Asset Management Inc. now owns 186 shares of the business services provider's stock worth $26,000 after purchasing an additional 128 shares in the last quarter. WealthTrak Capital Management LLC acquired a new position in shares of Paychex during the fourth quarter worth about $28,000. Millstone Evans Group LLC acquired a new position in shares of Paychex during the fourth quarter worth about $33,000. Alpine Bank Wealth Management acquired a new position in shares of Paychex during the first quarter worth about $34,000. Finally, MorganRosel Wealth Management LLC acquired a new position in shares of Paychex in the first quarter worth about $34,000. Institutional investors and hedge funds own 83.47% of the company's stock.

Paychex Stock Performance

The company has a quick ratio of 1.39, a current ratio of 1.28 and a debt-to-equity ratio of 1.10. The company has a 50 day moving average of $151.73 and a 200 day moving average of $147.76. The firm has a market cap of $51.85 billion, a price-to-earnings ratio of 31.50, a PEG ratio of 2.95 and a beta of 0.92.

About Paychex

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.