Paycom initiated with an Outperform at William Blair

William Blair initiated coverage of Paycom Software with an Outperform rating and no price target. Paycom was one of the first vendors to provide a cloud payroll solution, and over time has become one of the largest human capital managemewbt vendors to the midmarket, the analyst tells investors in a research note. The firm says the company has expanded its addressable market and targets businesses with 50 to 10,000 employees. It believes Paycom is only 4% penetrated in its addressable market, leaving “plenty of room: for the company to increase revenue 20%-plus over the next five years. Blair sees an attractive entry point at current share levels for a business it views as a good long-term compounder.