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→Stable
- Target Exhaustion Watch↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 19, 2026
Paycom Software, Inc. (PAYC) Stock Analysis
Technology · Software - Application
Wait for pullback to $232.34. Price sits above the model's entry target of $232.34; the risk/reward becomes favorable on a pullback. Key risks: Analyst target reached - limited upside remaining; Near 52-week high (4.8% away).
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
Wait for pullback to $232.34. Price sits above the model's entry target of $232.34; the risk/reward becomes favorable on a pullback. Key risks: Analyst target reached - limited upside remaining; Near 52-week high (4.8% away). Chart setup: No clear chart pattern; technical signals are mixed. Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 1.42, quality 7.7/10, growth 7.5/10). Score 5.7/10, moderate confidence.
Passes 4/7 gates (positive momentum, clean insider activity, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio and earnings proximity 7d<=7d. 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.
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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 2026-10-28Recent 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 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
- NEWS J.P. Morgan Initiates Paycom Software(PAYC.US) With Hold Rating, Announces Target Price $264 - Moomoo — Moomoo neutral
Generated 2026-10-28T11:48:53Z.
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. How we score · Editorial policy
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Frequently Asked Questions
Wait for pullback to $232.34. Price sits above the model's entry target of $232.34; the risk/reward becomes favorable on a pullback. Key risks: Analyst target reached - limited upside remaining; Near 52-week high (4.8% away). Chart setup: No clear chart pattern; technical signals are mixed. Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 1.42, quality 7.7/10, growth 7.5/10). Analyst target $220.98 reached (−15.6%), stop $216.20 (−21.2%), A.R:R -1.0:1. Score 5.7/10, moderate confidence.
Analyst target $220.98 reached (−15.6% from $261.94); no take-profit level is published. Analyst target $220.98 reached (−15.6%), stop $216.20 (−21.2%), A.R:R -1.0:1. Stop-loss: $216.20.
Analyst target reached - limited upside remaining; Near 52-week high (4.8% away); Sector modifier (Technology): -0.8.
Paycom Software, Inc. trades at a P/E of 27.7 (forward 18.8). TrendMatrix value score: 4.8/10. Verdict: Buy (Wait for Entry).
28 analysts cover PAYC with a consensus score of 3.6/5. Average price target: $246.
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.