Paychex (NASDAQ:PAYX) Shares Gap Up Following Earnings Beat

Paychex, Inc. (NASDAQ:PAYX)’s share price gapped up prior to trading on Wednesday following a better than expected earnings announcement. The stock had previously closed at $144.13, but opened at $148.81. Paychex shares last traded at $151.53, with a volume of 805,658 shares traded.

The business services provider reported $1.49 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.48 by $0.01. The firm had revenue of $1.51 billion for the quarter, compared to the consensus estimate of $1.51 billion. Paychex had a net margin of 32.02% and a return on equity of 45.28%. The business’s revenue for the quarter was up 4.8% on a year-over-year basis. During the same period in the prior year, the company posted $1.38 earnings per share.

Paychex Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Thursday, February 27th. Shareholders of record on Friday, February 7th were paid a dividend of $0.98 per share. This represents a $3.92 annualized dividend and a yield of 2.58%. The ex-dividend date of this dividend was Friday, February 7th. Paychex’s payout ratio is presently 81.67%.

Wall Street Analyst Weigh In

PAYX has been the subject of a number of research analyst reports. UBS Group boosted their price target on Paychex from $152.00 to $155.00 and gave the stock a “neutral” rating in a report on Tuesday, March 4th. Royal Bank of Canada reissued a “sector perform” rating and issued a $148.00 target price on shares of Paychex in a report on Friday, December 20th. Morgan Stanley raised their price target on shares of Paychex from $137.00 to $142.00 and gave the company an “equal weight” rating in a research note on Thursday. Barclays upped their price objective on shares of Paychex from $135.00 to $140.00 and gave the stock an “equal weight” rating in a research report on Monday, December 23rd. Finally, Stifel Nicolaus boosted their target price on shares of Paychex from $141.00 to $156.00 and gave the stock a “hold” rating in a research note on Thursday. Two equities research analysts have rated the stock with a sell rating and ten have issued a hold rating to the stock. According to data from MarketBeat, the stock currently has an average rating of “Hold” and an average target price of $137.58.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of PAYX. Meeder Asset Management Inc. lifted its holdings in Paychex by 220.7% in the fourth quarter. Meeder Asset Management Inc. now owns 186 shares of the business services provider’s stock valued at $26,000 after buying an additional 128 shares during the period. Union Bancaire Privee UBP SA bought a new position in shares of Paychex in the 4th quarter worth about $28,000. WealthTrak Capital Management LLC acquired a new position in shares of Paychex in the 4th quarter valued at about $28,000. Millstone Evans Group LLC bought a new stake in shares of Paychex during the 4th quarter valued at about $33,000. Finally, Avion Wealth grew its stake in Paychex by 469.8% during the fourth quarter. Avion Wealth now owns 245 shares of the business services provider’s stock worth $34,000 after purchasing an additional 202 shares during the period. Institutional investors and hedge funds own 83.47% of the company’s stock.

Paychex Stock Performance

The company has a debt-to-equity ratio of 0.20, a current ratio of 1.39 and a quick ratio of 1.39. The stock has a fifty day simple moving average of $148.13 and a two-hundred day simple moving average of $143.10. The firm has a market capitalization of $54.67 billion, a P/E ratio of 31.96, a P/E/G ratio of 4.10 and a beta of 0.98.

Paychex Company Profile

Paychex, Inc, together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing.