Paycom (PAYC) Gets a Buy Rating from Oppenheimer

By Ryan Adsit

Oppenheimer analyst Brian Schwartz maintained a Buy rating on Paycom (PAYCResearch Report) today and set a price target of $220. The company’s shares closed yesterday at $202.53, close to its 52-week high of $203.04.

Schwartz said:

“We raise our PT to $220 (from $175) on PAYC on higher estimates, and after Paycom sustained good momentum with another beat-and-raise quarter. The sales productivity trends look strong and reveal good execution and healthy demand for mid-market payroll and HCM platform solutions. On balance, the guidance implies some deceleration, but investors may look through it given the upside trend in recent results. Bottom Line: We believe Paycom’s proven successful sales motion, unique ability to inspire market changes, regular releases of new modules and functionality (i.e., direct data exchange), and lingering competitor challenges and displacements have put the company in a stronger position to capture a large TAM opportunity. For investors, Paycom is executing well, and its industry-leading growth and margin profile make it attractive. Reiterate Outperform.”

According to TipRanks.com, Schwartz is a top 25 analyst with an average return of 29.3% and a 78.4% success rate. Schwartz covers the Technology sector, focusing on stocks such as Instructure Inc, Salesforce.com, and Trade Desk Inc.

Currently, the analyst consensus on Paycom is a Moderate Buy with an average price target of $182.64, representing a -9.8% downside. In a report issued on April 16, KeyBanc also maintained a Buy rating on the stock with a $210 price target.

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Based on Paycom’s latest earnings release for the quarter ending December 31, the company reported a quarterly net profit of $31.39 million. In comparison, last year the company had a net profit of $41.06 million.

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Paycom Software, Inc. provides comprehensive, cloud-based human capital management (HCM) software solutions delivered as Software-as-a-Service. It provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement.