Paychex Story

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PAYX -- USA Stock  

USD 82.84  2.19  2.58%

While some of us are excited about industrials space, it makes sense to break down Paychex in greater detail to make a better assessment of its actual value. We will analyze why Paychex investors may still consider a stake in the business. Is the entity current valuation justified? We will cover the stock valuation to give you a better outlook on taking a position in the stock.
Published over two weeks ago
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Is Paychex growth trend slowing down?
This firm currently holds 936 M in liabilities with Debt to Equity (D/E) ratio of 0.34, which is about average as compared to similar companies. Paychex has performance score of 5 on a scale of 0 to 100. The company holds a Beta of -0.2174, which implies not very significant fluctuations relative to the market. Let's try to break down what Paychex's beta means in this case. As returns on the market increase, returns on owning Paychex are expected to decrease at a much lower rate. During the bear market, Paychex is likely to outperform the market. Although it is extremely important to respect Paychex current trending patterns, it is better to be realistic regarding the information on equity existing price patterns. The philosophy towards forecasting future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Paychex technical indicators, you can presently evaluate if the expected return of 0.11% will be sustainable into the future. Paychex right now holds a risk of 1.37%. Please check Paychex treynor ratio, expected short fall, as well as the relationship between the Expected Short fall and day median price to decide if Paychex will be following its historical price patterns.
We determine the current worth of Paychex using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Paychex based exclusively on its fundamental and basic technical indicators. By analyzing Paychex's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Paychex's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Paychex. We calculate exposure to Paychex's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Paychex's related companies.

Paychex Investment Alerts

Paychex investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Paychex performance across your portfolios.Please check all investment alerts for Paychex

Paychex Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Paychex value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Paychex competition to find correlations between indicators driving the intrinsic value of Paychex.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Paychex, but it might be worth checking our own buy vs. sell analysis

Paychex exotic insider transaction detected

Legal trades by Paychex insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Paychex insider trading alert for general transaction of stock option by Stephanie Schaeffer, CLO Secretary, on 22nd of October 2020. This event was filed by Paychex Inc with SEC on 2020-10-22. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

What is the case for Paychex Investors

The company reported the previous year's revenue of 4.04 B. Net Income was 1.1 B with profit before overhead, payroll, taxes, and interest of 2.76 B.

Margins Breakdown

Paychex profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Paychex itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Paychex profit margins.
25.06
Profit Margin
40.99
Operating Margin
44.69
EBITDA Margin
Operating Margin40.99
EBITDA Margin44.69
Gross Margin61.68
Profit Margin25.06


Paychex Net Income Per Employee is increasing over the last 8 years. Further, Paychex Revenue Per Employee is increasing over the last 8 years. The previous year's value of Paychex Revenue Per Employee was 221,861.

Will Paychex slide impact its fundamentals?

Current Information Ratio is up to -0.04. Price may slide again. Paychex has relatively low volatility with skewness of -0.5 and kurtosis of 1.45. However, we advise all investors to independently investigate Paychex to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

Our Conclusion on Paychex

While other entities under the staffing & employment services industry are still a bit expensive, Paychex may offer a potential longer-term growth to investors. With a relatively neutral outlook on the current economy, it is better to hold off any trading of Paychex as the current risk-reward utility is not appealing enough. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Paychex.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Paychex. Please refer to our Terms of Use for any information regarding our disclosure principles.

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