Paychex Story

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PAYX -- USA Stock  

USD 87.55  0.68  0.78%

Paychex is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 23rd of December 2020. While some investors are becoming indifferent towards industrials space, we are going to break down the feasibility of acquiring Paychex as a potential hedging instrument for your current portfolios. Should we be more optimistic in anticipation of a recovery?
Published over a month ago
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Our current take on Paychex (NASDAQ:PAYX) analyst consensus
Paychex is FAIRLY VALUED at 94.11 per share with modest projections ahead. Macroaxis provides advice on Paychex to complement and cross-verify current analyst consensus on Paychex. Our recommendation engine determines the firm's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
What is the right price you would pay to acquire a share of Paychex? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated. Please read more on our stock advisor page.

What is happening with Paychex this year

Annual and quarterly reports issued by Paychex are formal financial statements that are published yearly and quarterly and sent to Paychex stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934. Companies such as Paychex often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How Paychex utilizes its cash?

To perform a cash flow analysis of Paychex, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Paychex is receiving and how much cash it distributes out in a given period. The Paychex cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Paychex Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. Paychex reported Net Cash Flow from Operations of 1.3 Billion in 2020

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 Robert Schrader, VPController, on 28th of December 2020. This event was filed by Paychex Inc with SEC on 2020-12-28. 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

Earning per share calculations of Paychex is based on official Zacks consensus of 10 analysts regarding Paychex's future annual earnings. Given the historical accuracy of 95.74%, the future earnings per share of the company is estimated to be 2.8262 with the lowest and highest values of 2.79 and 2.9, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses.

Is Paychex a risky opportunity?

Let's check the volatility. Paychex is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind Paychex (NASDAQ:PAYX) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. acquiring a share of a Paychex stock makes you a part-owner of that company.

Paychex Current Consensus

Here is the current trade recommendation based on an ongoing consensus estimate among financial analysis covering Paychex. The Paychex consensus assessment is calculated by taking the average estimates from all of the analysts covering Paychex

Strong Buy
Strong Sell
Strong Buy17.14
Strong Sell17.14

Paychex is projected to stay under $99 in January

Expected Short fall just dropped to -1.32, may suggest upcoming price decrease. Paychex has relatively low volatility with skewness of -0.09 and kurtosis of -0.24. 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 Bottom Line On Paychex

While many other companies in the staffing & employment services industry are either recovering or due for a correction, Paychex may not be as strong as the others in terms of longer-term growth potentials. Taking everything into account, as of the 22nd of December 2020, we believe that at this point, Paychex is fairly valued with very small odds of financial distress within the next 2 years. Our up-to-date buy-hold-sell advice on the company is Strong Buy.

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 Raphi Shpitalnik do not own shares of Paychex. Please refer to our Terms of Use for any information regarding our disclosure principles.

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