Paychex (NASDAQ:PAYX) Share Price Breaks Above 200-Day Moving Average - Should You Sell?

Key Points

• Paychex shares broke above their 200-day moving average, reaching $119.47 before closing at $118.04, compared with a 200-day average of $105.95.
• Analyst sentiment remains cautious: the consensus rating is “Hold”, with an average price target of $127.59, while several firms recently lowered their targets.
• Paychex reported quarterly EPS of $1.34, beating estimates, while revenue rose 5.9% year over year to $1.63 billion. The company also declared a $1.19 quarterly dividend, equivalent to a 4.0% yield.

Paychex, Inc. (NASDAQ:PAYX - Get Free Report)'s stock price crossed above its 200-day moving average during trading on Friday. The stock has a 200-day moving average of $105.95 and traded as high as $119.47. Paychex shares last traded at $118.04, with a volume of 2,340,078 shares.

Wall Street Analysts Forecast Growth

Several analysts recently issued reports on PAYX shares. TD Cowen reduced their price objective on shares of Paychex from $117.00 to $105.00 and set a "hold" rating on the stock in a report on Friday, September 25th. BMO Capital Markets dropped their price target on shares of Paychex from $118.00 to $113.00 and set a "market perform" rating for the company in a research report on Thursday, September 24th. Wells Fargo & Company lifted their price target on shares of Paychex from $95.00 to $111.00 and gave the company an "underweight" rating in a research report on Wednesday, September 9th. Morgan Stanley boosted their price target on shares of Paychex from $107.00 to $109.00 and gave the company an "equal weight" rating in a research note on Tuesday, June 30th. Finally, Stephens decreased their price objective on shares of Paychex from $132.00 to $113.00 and set an "equal weight" rating on the stock in a report on Thursday, September 24th. One investment analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, thirteen have issued a Hold rating and two have issued a Sell rating to the company's stock. According to MarketBeat, the company has an average rating of "Hold" and an average price target of $127.59.

Paychex Price Performance

The company has a debt-to-equity ratio of 1.23, a current ratio of 1.28 and a quick ratio of 1.28. The firm has a market capitalization of $42.02 billion, a price-to-earnings ratio of 23.42, a PEG ratio of 2.49 and a beta of 0.86. The stock has a 50 day moving average price of $113.82 and a two-hundred day moving average price of $105.95.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its earnings results on Wednesday, September 23rd. The business services provider reported $1.34 earnings per share (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 firm had revenue of $1.63 billion for the quarter, compared to analyst estimates of $1.63 billion. During the same quarter in the prior year, the company earned $1.22 EPS. Paychex'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. As a group, analysts expect that Paychex, Inc. will post 5.96 EPS for the current year.

Paychex Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, November 25th. Stockholders of record on Monday, October 26th will be given a dividend of $1.19 per share. This represents a $4.76 annualized dividend and a dividend yield of 4.0%. The ex-dividend date of this dividend is Monday, October 26th. Paychex's dividend payout ratio is currently 94.44%.

Insider Activity

In other news, Director Joseph Velli sold 7,839 shares of the firm's stock in a transaction that occurred on Wednesday, October 14th. The shares were sold at an average price of $107.68, for a total value of $844,103.52. Following the completion of the transaction, the director owned 81,725 shares of the company's stock, valued at approximately $8,800,148. This trade represents a 8.75% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Corporate insiders own 0.60% of the company's stock.

Institutional Investors Weigh In On Paychex

Hedge funds have recently added to or reduced their stakes in the business. Parkside Financial Bank & Trust lifted its holdings in shares of Paychex by 6.3% during the 2nd quarter. Parkside Financial Bank & Trust now owns 1,519 shares of the business services provider's stock worth $149,000 after acquiring an additional 90 shares during the period. Armbruster Capital Management Inc. boosted its position in shares of Paychex by 0.5% in the first quarter. Armbruster Capital Management Inc. now owns 20,299 shares of the business services provider's stock worth $1,870,000 after acquiring an additional 107 shares during the last quarter. Seelaus Asset Management LLC boosted its position in shares of Paychex by 2.0% in the first quarter. Seelaus Asset Management LLC now owns 5,464 shares of the business services provider's stock worth $503,000 after acquiring an additional 107 shares during the last quarter. United Community Bank grew its holdings in Paychex by 3.1% in the second quarter. United Community Bank now owns 3,635 shares of the business services provider's stock valued at $357,000 after purchasing an additional 110 shares during the period. Finally, Bryn Mawr Trust Advisors LLC grew its holdings in Paychex by 4.3% in the first quarter. Bryn Mawr Trust Advisors LLC now owns 2,678 shares of the business services provider's stock valued at $247,000 after purchasing an additional 111 shares during the period. 83.47% of the stock is currently owned by institutional investors and hedge funds.

Paychex Company Profile

Paychex, Inc provides payroll, human resources and employee-benefits solutions to small and medium-sized businesses. Its offerings include payroll processing, tax administration, time and attendance management, recruiting, onboarding, human resources administration, compliance support and employee benefits services.

The company also provides retirement-plan services, insurance solutions and professional employer organization services. Through its software and outsourced services, Paychex helps employers manage workforce administration, employee data and regulatory requirements.

Paychex was founded in 1971 by B.

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