
Paycom Software (PAYC) Stock Forecast & Price Target
Paycom Software (PAYC) Analyst Ratings
Bulls say
Paycom Software has demonstrated substantial growth, with its client count increasing from 12,800 in 2014 to 37,500 in 2024, reflecting a compound annual growth rate (CAGR) of 16%. The company's success in acquiring new clients and cross-selling additional modules, particularly during 2021 and 2022, combined with favorable conditions due to rising interest rates, underscores its robust market position. Additionally, while capital expenditures as a percentage of revenue have increased from 7% to 13% in a recent quarter, this investment is expected to support ongoing expansion and technological enhancements across its customer base.
Bears say
Paycom Software faces a challenging financial outlook, with projected New Annual Recurring Revenue (ARR) declining by 15%, despite guidance indicating an 11% year-over-year growth in recurring and other revenue for fiscal 4Q25, amounting to $516 million. Additionally, the company's reliance on extensive investments in technology, including $130 million in GPUs, is anticipated to negatively impact gross margin, potentially leading to margins below current consensus estimates. Coupled with a troubling decrease in customer retention from 94% in 2021 to 90% in 2023, the company is confronting significant competitive pressures which may further hinder its growth trajectory.
This aggregate rating is based on analysts' research of Paycom Software and is not a guaranteed prediction by Public.com or investment advice.
Paycom Software (PAYC) Analyst Forecast & Price Prediction
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