Added to YB: 2026-04-23
Pitch date: 2026-02-18
PAYX [bullish]
Paychex, Inc.
-0.72%
current return
Author Info
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Company Info
Paychex, Inc., together with its subsidiaries, provides human capital management solutions (HCM) for payroll, employee benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India.
Market Cap
$33.6B
Pitch Price
$94.11
Price Target
147.50 (+58%)
Dividend
4.61%
EV/EBITDA
12.52
P/E
20.68
EV/Sales
5.81
Sector
Professional Services
Category
value
Paychex, Inc. - $PAYX
PAYX: HCM leader mispriced at 16x fwd P/E (-25% vs 5yr avg, 4.6% yield) on misplaced AI fears. Thesis: AI enhances margins (45-48% target) via agentic automation, can't replace compliance firewall (legal liability moat). $4.1B Paycor deal expands TAM to $100B+ mid-market, $100M synergies FY26. 75%+ recurring rev, 82-85% retention, MSD topline/DD EPS growth. Float income hedges rates. PT $147.50 (23-24x P/E) = 46% upside.
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