Paychex (NASDAQ:PAYX) Shares Gap Down on Disappointing Earnings

Paychex, Inc. (NASDAQ:PAYX) shares gapped down before the market opened on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $152.25, but opened at $145.27. Paychex shares last traded at $138.65, with a volume of 945,157 shares.

The business services provider reported $1.19 earnings per share (EPS) for the quarter, hitting the consensus estimate of $1.19. The business had revenue of $1.43 billion for the quarter, compared to analyst estimates of $1.38 billion. Paychex had a return on equity of 45.30% and a net margin of 31.99%. During the same quarter in the prior year, the company earned $1.12 earnings per share.

Paychex Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Thursday, May 29th. Stockholders of record on Monday, May 12th were paid a $1.08 dividend. The ex-dividend date of this dividend was Monday, May 12th. This is an increase from Paychex’s previous quarterly dividend of $0.98. This represents a $4.32 annualized dividend and a dividend yield of 3.13%. Paychex’s dividend payout ratio is 90.00%.

Wall Street Analyst Weigh In

A number of analysts recently commented on the company. Stifel Nicolaus increased their price target on Paychex from $141.00 to $156.00 and gave the company a “hold” rating in a research report on Thursday, March 27th. Barclays set a $155.00 price target on Paychex and gave the company an “equal weight” rating in a research report on Tuesday. JPMorgan Chase & Co. increased their price target on Paychex from $140.00 to $148.00 and gave the company an “underweight” rating in a research report on Wednesday, June 18th. Morgan Stanley reaffirmed an “equal weight” rating on shares of Paychex in a research report on Tuesday. Finally, Jefferies Financial Group reissued a “hold” rating on shares of Paychex in a research report on Friday, May 23rd. Two investment analysts have rated the stock with a sell rating and ten have assigned a hold rating to the stock. According to MarketBeat, Paychex presently has a consensus rating of “Hold” and a consensus target price of $143.36.

Insider Transactions at Paychex

In related news, Director Joseph M. Velli sold 3,650 shares of Paychex stock in a transaction on Tuesday, April 15th. The stock was sold at an average price of $149.25, for a total transaction of $544,762.50. Following the completion of the sale, the director now owns 78,455 shares of the company’s stock, valued at approximately $11,709,408.75. This trade represents a 4.45% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Corporate insiders own 11.40% of the company’s stock.

Institutional Investors Weigh In On Paychex

Several large investors have recently added to or reduced their stakes in the business. Summit Wealth Partners LLC boosted its stake in Paychex by 2.4% during the first quarter. Summit Wealth Partners LLC now owns 3,027 shares of the business services provider’s stock valued at $467,000 after buying an additional 70 shares during the period. LGT Group Foundation lifted its stake in Paychex by 2.8% during the first quarter. LGT Group Foundation now owns 2,528 shares of the business services provider’s stock worth $390,000 after purchasing an additional 70 shares during the last quarter. Golden State Equity Partners lifted its stake in Paychex by 0.9% during the first quarter. Golden State Equity Partners now owns 7,623 shares of the business services provider’s stock worth $1,176,000 after purchasing an additional 71 shares during the last quarter. Palumbo Wealth Management LLC lifted its stake in Paychex by 2.4% during the first quarter. Palumbo Wealth Management LLC now owns 3,192 shares of the business services provider’s stock worth $492,000 after purchasing an additional 74 shares during the last quarter. Finally, King Wealth Management Group lifted its stake in Paychex by 4.7% during the first quarter. King Wealth Management Group now owns 1,669 shares of the business services provider’s stock worth $257,000 after purchasing an additional 75 shares during the last quarter. Institutional investors own 83.47% of the company’s stock.

Paychex Stock Performance

The company has a debt-to-equity ratio of 0.19, a current ratio of 1.39 and a quick ratio of 1.39. The company has a 50 day simple moving average of $151.83 and a 200-day simple moving average of $147.75. The stock has a market cap of $49.68 billion, a P/E ratio of 28.74, a price-to-earnings-growth ratio of 3.23 and a beta of 0.92.

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.