Paychex (NASDAQ:PAYX) Updates FY 2027 Earnings Guidance

Key Points

• Paychex raised its FY 2027 earnings guidance to EPS of 5.90–6.01, slightly above the consensus estimate of 5.89. Revenue guidance of $6.8 billion–$6.9 billion is roughly in line with expectations.
• The company’s latest quarterly results beat estimates, with EPS of $1.32 versus $1.31 expected and revenue of $1.61 billion versus $1.60 billion expected. Revenue also rose 12.5% year over year, showing continued growth.
• Despite the earnings beat, the stock was under pressure because the FY 2027 outlook signals slower growth after a strong fiscal 2026. The company also recently increased its quarterly dividend to $1.19 per share, up from $1.08.

Paychex (NASDAQ:PAYX - Get Free Report) updated its FY 2027 earnings guidance on Wednesday. The company provided EPS guidance of 5.900-6.010 for the period, compared to the consensus EPS estimate of 5.890. The company issued revenue guidance of $6.8 billion-$6.9 billion, compared to the consensus revenue estimate of $6.9 billion.

Wall Street Analyst Weigh In

A number of analysts have recently commented on the company. Jefferies Financial Group lowered their price target on Paychex from $110.00 to $105.00 and set a "hold" rating for the company in a research note on Thursday, March 26th. Guggenheim assumed coverage on shares of Paychex in a report on Thursday, March 19th. They set a "neutral" rating for the company. UBS Group lowered their target price on shares of Paychex from $98.00 to $94.00 and set a "neutral" rating for the company in a research note on Monday, April 13th. JPMorgan Chase & Co. cut their target price on shares of Paychex from $125.00 to $100.00 and set an "underweight" rating on the stock in a report on Thursday, March 26th. Finally, BMO Capital Markets boosted their price target on shares of Paychex to $52.00 and gave the company an "outperform" rating in a report on Thursday, March 26th. One research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, ten have issued a Hold rating and four have assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus target price of $105.07.

Paychex Price Performance

Shares of PAYX traded down $1.87 during trading hours on Wednesday, reaching $96.12. The stock had a trading volume of 2,319,036 shares, compared to its average volume of 3,724,482. The company has a debt-to-equity ratio of 1.13, a quick ratio of 1.26 and a current ratio of 1.26. Paychex has a 12 month low of $85.45 and a 12 month high of $148.76. The stock has a market capitalization of $34.44 billion, a PE ratio of 21.19 and a beta of 0.84. The company's 50-day moving average is $95.13 and its two-hundred day moving average is $99.36.

Paychex (NASDAQ:PAYX - Get Free Report) last issued its quarterly earnings data on Wednesday, June 24th. The business services provider reported $1.32 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.31 by $0.01. Paychex had a net margin of 25.84% and a return on equity of 48.52%. The business had revenue of $1.61 billion during the quarter, compared to analyst estimates of $1.60 billion. During the same quarter last year, the business earned $1.19 EPS. The firm's quarterly revenue was up 12.5% on a year-over-year basis. Paychex has set its FY 2027 guidance at 5.900-6.010 EPS. Research analysts expect that Paychex will post 5.49 EPS for the current year.

Paychex Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, May 29th. Investors of record on Wednesday, May 13th were issued a $1.19 dividend. The ex-dividend date was Wednesday, May 13th. This is a boost from Paychex's previous quarterly dividend of $1.08. This represents a $4.76 annualized dividend and a yield of 5.0%. Paychex's dividend payout ratio (DPR) is currently 104.85%.

Key Stories Impacting Paychex

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: Paychex beat quarterly expectations with EPS of $1.32 versus $1.31 expected and revenue of $1.61 billion versus $1.60 billion expected, showing the business is still growing. Article title
• Positive Sentiment: The company also highlighted strong fiscal 2026 performance, including double-digit revenue and earnings growth, plus shareholder returns of $2.2 billion and expanded AI efforts with its WISE Workforce Intelligence Engine. Article title
• Neutral Sentiment: Paychex raised FY 2027 EPS guidance to 5.900-6.010, slightly above the consensus estimate of 5.890, while revenue guidance of about $6.8 billion-$6.9 billion is roughly in line with expectations. Article title
• Negative Sentiment: The stock is under pressure because the FY 2027 outlook points to slower growth after a strong fiscal 2026, with revenue growth projected at 5% to 6% and EPS growth at 7% to 9%, well below recent double-digit trends. Article title
• Negative Sentiment: Some reports also noted higher-than-expected expenses, which may be weighing on sentiment despite the earnings beat. Article title

Hedge Funds Weigh In On Paychex

Hedge funds have recently bought and sold shares of the company. State Street Corp grew its holdings in Paychex by 1.6% during the 4th quarter. State Street Corp now owns 13,988,393 shares of the business services provider's stock worth $1,569,218,000 after acquiring an additional 216,045 shares during the period. Charles Schwab Investment Management Inc. lifted its position in shares of Paychex by 2.3% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 11,550,173 shares of the business services provider's stock valued at $1,295,698,000 after acquiring an additional 263,152 shares during the period. Select Equity Group L.P. boosted its stake in Paychex by 15.9% during the second quarter. Select Equity Group L.P. now owns 4,051,413 shares of the business services provider's stock worth $589,319,000 after acquiring an additional 557,101 shares in the last quarter. Dimensional Fund Advisors LP grew its holdings in Paychex by 2.7% in the fourth quarter. Dimensional Fund Advisors LP now owns 2,882,215 shares of the business services provider's stock worth $323,352,000 after purchasing an additional 76,824 shares during the period. Finally, Federated Hermes Inc. increased its stake in Paychex by 4,141.2% in the fourth quarter. Federated Hermes Inc. now owns 2,409,229 shares of the business services provider's stock valued at $270,267,000 after purchasing an additional 2,352,423 shares in the last quarter. Institutional investors 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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