Paycom Software posts best-in-class margins with 22% net margin and 37% return on equity — ranking superior to peers on both metrics — yet trades near its analyst target with only 1.2% upside remaining and a death cross that makes new entry unattractive at this level.
Thesis pillars
- Dividend Sustainability Signal↑Improving
- Best In Class Margins Roe↓Deteriorating
- Target Exhaustion Watch↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Paycom Software, Inc. (PAYC) Stock Analysis
Technology · Software - Application
Sell if holding. Analyst target reached at $214.94 — A.R:R is negative (-1.0) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Leverage penalty (D/E 1.7): -1.0.
Paycom Software provides a cloud-based, single-database HCM SaaS solution covering payroll, talent acquisition, HR management, and time and labor applications for U.S. businesses. The company serves approximately 39,200 clients directly through a U.S. sales force, with 91%... Read more
Sell if holding. Analyst target reached at $214.94 — A.R:R is negative (-1.0) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Leverage penalty (D/E 1.7): -1.0. Chart setup: No clear chart pattern; technical signals are mixed. Score 6.2/10, moderate confidence.
Passes 7/9 gates (positive momentum, clean insider activity, news boost analyst 0.40, news boost analyst cluster(3), earnings proximity 88d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: moderate.
About Paycom Software, Inc.
About Paycom Software, Inc.
Paycom Software serves approximately 39,200 clients through a single-database HCM SaaS platform spanning payroll, talent acquisition, talent management, HR management, and time and labor management — sold exclusively through a direct sales force with offices in 41 of the 50 largest U.S. metropolitan statistical areas. The company reported 91% annual revenue retention in 2025 versus 90% in 2024 and maintains fully redundant data centers in Oklahoma, Texas, and Arizona.
Paycom earns revenue through per-employee pricing that scales with client headcount and the number of applications deployed; the historical majority of revenues has come from payroll applications. The company sells exclusively through an internally trained direct sales force — no distributors or resellers — and competes against Automatic Data Processing, Dayforce, Paychex, Paylocity, Workday, Oracle, and others in a fragmented market where several competitors hold larger distribution agreements and an established global presence. Pricing pressure from lower-cost alternatives is an ongoing factor; the 10-K identifies the proliferation of white-label and embedded payroll offerings as an emerging competitive threat. Paycom's research and development team is concentrated in Oklahoma and Texas, where management believes technology talent costs are lower than in coastal markets.
Show full overview
Paycom's office-centric operational model — requiring employees to work in person rather than under remote or hybrid arrangements — may constrain talent acquisition as competitors offer more flexible work policies. Combined with immigration law changes the 10-K identifies as amplifying competition for software developers and IT personnel, this creates a structural hiring challenge at a time when the company must continuously develop new applications to maintain its per-employee revenue expansion thesis. The company explicitly names Automatic Data Processing, Paychex, and Workday as peers competing for the same talent pool, none of whom maintain a similarly office-centric posture.
See also: Technology · Software - Application
From Paycom Software, Inc.'s most recent 10-K filing, extracted June 11, 2026.
Recent developments
updated 2026-08-09Recent Developments — Paycom Software, Inc.
Latest news
- NEWS Analysts Offer Insights on Technology Companies: Amkor (AMKR), Paycom (PAYC) and Agilysys (AGYS) - The Globe and Mail — The Globe and Mail neutral
- NEWS Paycom Software Inc (PAYC) Earnings Forecast: Future EPS & Revenue Growth Estimates - TradingKey — TradingKey neutral
- NEWS Is It Too Late to Buy Paycom Software Inc (PAYC) After 6.9% Rall - GuruFocus — GuruFocus positive
- NEWS Paycom Software, Inc. $PAYC Position Boosted by Vest Financial LLC - MarketBeat — MarketBeat positive
- NEWS Paycom Software (PAYC) to Release Quarterly Earnings on Wednesday - MarketBeat — MarketBeat neutral
Generated 2026-08-09T08:47:15Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMProductpayroll applications10-K Item 1: 'We have historically generated the majority of our revenues from our payroll applications.'
Material Events(8-K, last 90d)
- 2026-03-26Item 5.02LOWDirector Archana Vemulapalli resigned from the Board effective March 31, 2026 to pursue other professional opportunities. No disagreement with company operations or policies cited. Board reduced from 7 to 6 directors; no successor named.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
Rating Breakdown
1 floor-breaker
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Analyst target reached at $214.94 — A.R:R is negative (-1.0) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Leverage penalty (D/E 1.7): -1.0. Chart setup: No clear chart pattern; technical signals are mixed. Prior stop was $199.89. Score 6.2/10, moderate confidence.
Take-profit target: $247.18 (-14.7% upside). Prior stop was $199.89. Stop-loss: $199.89.
Analyst target reached - limited upside remaining; Leverage penalty (D/E 1.7): -1.0; Euphoria warning: extreme positivity (+0.97) + overbought RSI 81.
Paycom Software, Inc. trades at a P/E of 22.8 (forward 15.5). TrendMatrix value score: 5.3/10. Verdict: Sell.
27 analysts cover PAYC with a consensus score of 3.6/5. Average price target: $204.
What does Paycom Software, Inc. do?Paycom Software provides a cloud-based, single-database HCM SaaS solution covering payroll, talent acquisition, HR...
Paycom Software provides a cloud-based, single-database HCM SaaS solution covering payroll, talent acquisition, HR management, and time and labor applications for U.S. businesses. The company serves approximately 39,200 clients directly through a U.S. sales force, with 91% annual revenue retention in 2025.