In a report released today, Jared Levine from TD Cowen maintained a Hold rating on Paycom (PAYC – Research Report), with a price target of $242.00.
Jared Levine has given his Hold rating due to a combination of factors influencing Paycom’s financial outlook. One of the primary reasons for this rating is the adjustment of future fiscal year estimates, particularly a slight reduction in FY26 projections. This adjustment is mainly attributed to anticipated lower float revenue and interest income, which are crucial components of Paycom’s financial performance.
Despite these reductions, there is an optimistic outlook for revenue growth excluding float, which has led to an increase in out-year revenue estimates. However, the changes to profit margins are considered immaterial, indicating that they do not significantly impact the overall financial health of the company. Additionally, the price target has been raised to $242, based on a valuation metric of 29 times the estimated enterprise value to free cash flow for CY26. This balanced view of potential growth and existing financial challenges underpins the Hold rating.
Based on the recent corporate insider activity of 183 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PAYC in relation to earlier this year.