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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Paycom Software, Inc. (XNYS:PAYC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PAYC
Name:
PAYCOM SOFTWARE, INC. (XNYS:PAYC)
Sector:
82.76M
Industry:
Software�Application
CEO:
Mr. Chad Richison
Total Employees:
5,385
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -106.35% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PAYCOM SOFTWARE, INC.(PAYC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
344.46
One Month Price Target:
$347.28
Six Month Price Target :
$361.41
Likely Price in One Year's Time:
Ticker:
$378.36
Likely Trading Range Today Under (Normal Volatility)
$342.83
Price Upper limit ($) :
$346.75
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$321.07
This week:
$292.16
This month :
$239.86
Other Primary facts
Market Cap:
20.77B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
60.03M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.04%
-13.39%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$452.95
$402.89
$235.97
$286.03
Medium risk (<10%) entry points
Buy Call
Sell Call
$386.59
Buy Put:
Sell Put:
$375.91
$302.19
$313.01
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PAYC
Sharpe Ratio:
2.59%
Comparison:
PAYC, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 169.09% higher than the industry
& ratio is 13.79% higher than the market/S&P 500 average
Average Returns/Yield of
PAYC
Daily returns:
0.10%
Weekly returns:
0.48%
Monthly returns:
1.92%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is 131.40% above industry average
Classification:
PAYC, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.97
Statistical test of Returns:
PAYC has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.35%
Weekly Volatility:
7.50%
Monthly Volatility:
14.99%
Yearly Volatility:
51.94%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.54%
Volatility in last five trading days has been -53.97% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.79%
Weekly VaR:
-15.18%
Monthly VaR:
-30.37%
How Much Can the price of
PAYC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$255.75
This translates to price declining to:
$51.67
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
PAYC is a 114.32% riskier investment compared to the market/S&P 500 & is 83.61% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -6.73% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PAYC
Beta in relation to market/S&P 500--1.46
Expected beta in 1 year's time:
1.023
Expected beta in 3 year's time:
1.447
Unlevered (debt free) Beta:
1.435
Beta in relation to Nasdaq (XNAS):
1.382
Beta in relation to all global stocks::
1.055
Beta Comparison & Analysis
Beta of competitors/peers::
1.227
Beta is 19.37% higher than peers
Average Industry Beta:
1.335
Beta is 9.64% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
24.07%
Sustainable growth rate is -22.62% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.098
Alpha is -515.69% below industry average alpha yield
Alpha is 625% higher than market/& is unsustainably high
Analysis of Cost of Capital of
PAYC
Equity cost of capital:
0.132
Equity cost of capital is 7.17% above industry mean WACC
Unlevered (without debt) cost of capital:
12.91%
Before-tax cost of debt:
0.75%
After-tax cost of debt:
0.59%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.59%
WACC is 44.90% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$18.94
Revenue growth rate per share of (3Y):
20.49
Annual revenue growth rate is -29.10% below industry average
EPS:
$3.84
Expected Annual growth rate of EPS (3Y):
2.38%
Expected future EPS growth rate is -91.28% lower than the Software�Application industry
Free cash flow (FCF) per share:
$3.51
-
-
Debt per share
$0.45
EBITDA per share
$6.04
Valuation Analysis Today of
PAYC
P/E Ratio:
87.75
P/E Ratio of Competitors/Peers:
20.39
P/E ratio is 330.26% higher than main peers & is -50.59% lower than the industry
Stock price/value with industry average P/E ratio: $681.97
PAYC is -49.49% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
18.19
Price to sales ratio is 58.56% above the industry mean
P/B (Price to book value ratio):
20.49
Price to free cash flow: 98.07
Price to free cash flow ratio is -0.22% lower than the industry
Net income growth rate (3Y):
42.42%
Net income growth rate is -82.63% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
2.67%
Net debt to equity ratio:
-32.89%
Debt to assets ratio:
0.49%
Net debt to assets ratio:
-6.10%
Debt-to-asset ratio is -99.10% below industry average
Ability to repay debt:
Interest coverage ratio:
1685.71
Interest coverage ratio is 3073.30% more than industry average
Looking forward:
Debt growth rate:
-5.63%
Annual debt growth is -101% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.62%
Analysis of Key Statistics
Correlation of price movement with the market:
0.727
Statistical significance of correlation:
PAYC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is 44.48% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.012
Covariance of price movement with the market:
-0.024
Kurtosis
3.25
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
0.188
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PAYC
Gross Profit Margin Ratio:
338%
Operating Profit Margin Ratio:
25.09%
Operating profit margin is -230.97% lower than the industry
Net Profit Margin Ratio:
338%
Effective Tax Rate:
22.54%
Effective tax rate is -14.54% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
22.13%
Return on equity (ROE) is -269.19% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.10%
Return on assets (ROA) is -206.77% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
1.08
Current ratio is -64.00% below industry average
Cash Conversion Cycle (days):
-9.1
Cash conversion cycle is -109.61% below industry average
The remaining useful life of property plant & equipment is: 4.8 years
Stock based compensation to net income ratio:
9.88%
In-depth Efficiency Analysis
Revenue generated per employee:
211.1K
Each employee generates -39% less revenue than industry average revenue per employee
EBITDA generated per employee:
67.3K
Each employee generates 526% more EBITDA than industry average revenue per employee
Profit generated per employee:
41.5K
Each employee generates -338% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
15.4K
Each employee generates -298% less free cash flow than industry average revenue per employee
Assets/Capital per employee
187.6K
Each employee generates -298% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 31.23%
Growth rate in R&D investment/expenditure is 1942.58% higher than the industry
Competitors/Peer firms of
PAYC
DiDi Global Inc. (OTCM:DIDIY)
Bill.com Holdings Inc (XNYS:BILL)
UIPATH, INC. (XNYS:PATH)
CGI INC. (XNYS:GIB)
BROADRIDGE FINANCIAL SOLUTIONS, INC. (XNYS:BR)
TYLER TECHNOLOGIES, INC. (XNYS:TYL)
FLEETCOR TECHNOLOGIES, INC. (XNYS:FLT)
TELEDYNE TECHNOLOGIES INCORPORATED (XNYS:TDY)
HUBSPOT, INC. (XNYS:HUBS)
Current Analyst Ratings
Strong buy�38%
Buy�8%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.14B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
174.10M
962.75M
125.32M
224.15M
512.38M
288.23M
39.76M
677.46M
-
215.00K
73.96M
362.43M
285.29M
223.27M
288.25M
64.98M
223.27M
Statement of Cash Flow
Date:
Period:
21.66M
Differed Income Tax :
- 10332.00K
Stock Based Compensation :
22.06M
Change in Working Capital :
- 6957.00K
Accounts Receivables:
- 8455.00K
Other Working Capital:
6.72M
Other Non-Cash Items:
- 1120.00K
Net Cash Provided by Operating Activities:
117.23M
Investments in PP&E:
- 34474.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
360.59M
-
360.59M
17.95M
732.00K
4.06B
4.43B
362.51M
51.89M
57.00M
-
-
538.89M
1.01B
-
5.44B
12.19M
1.78M
23.18M
17.14M
4.08B
4.11B
26.95M
73.63M
323.02M
-
4.44B
623.00K
1.01B
- 1119.0K
-
March 31, 2022 at 6:00:00 AM
851.56M
1.01B
5.44B
-
28.72M
- 331874.0K
-
- 33152.00K
- 67626.00K
- 444.00K
-
-
-
2.10B
2.10B
-
2.15B
3.96B
1.81B
117.23M
- 34474.00K
82.76M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
PAYC
2023
2024
2025
2026
2027
$342.77
$376.49
$413.54
$454.23
$498.93