Paychex Stock Valuation

PAYX
 Stock
  

USD 120.47  2.74  2.22%   

Do you wonder what the value of Paychex is? Calculating the true value of any business is not as easy as it may seem. While the market cap of a public entity, such as Paychex, is its stock price multiplied by the total number of shares outstanding, calculating Paychex's enterprise value requires a different approach. It uses Paychex's balance sheet items such as long-term debt, the book value of the preferred stock, minority interest, and other important financials.
Free Cash Flow is likely to drop to about 1.2 B in 2022. Enterprise Value is likely to drop to about 28.7 B in 2022.
Paychex holds a recent Real Value of $122.16 per share. The prevailing price of the company is $120.47. At this time, the company appears to be fairly valued. Our model determines the value of Paychex from analyzing the company fundamentals such as Return On Equity of 46.54 %, shares outstanding of 360.4 M, and Operating Margin of 43.99 % as well as examining its technical indicators and Probability Of Bankruptcy. In general, we support acquiring undervalued entities and dropping overvalued entities since, at some point, asset prices and their ongoing real values will merge together.
  
Paychex Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value. We also take into consideration other essential factors such as Paychex's management style, its c-level domain expertise and tenure, its overall leadership history as well as current capital structure, and future earnings potential.

Paychex Most Recent Valuation Data

Price Book
14.15
Price Sales
9.38
Forward Annual Dividend Yield
0.0256
EBITDA
2.1 B
Dividend Share
2.9
Ex Dividend Date
2022-11-08
Fairly Valued
Today 120.47
Please note that Paychex's price fluctuation is very steady at this time. Calculation of the real value of Paychex is based on 3 months time horizon. Increasing Paychex's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Paychex is useful when determining the fair value of the Paychex stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Paychex. Since Paychex is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Paychex Stock. However, Paychex's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
120.44
Downside
122.16
Real Value
123.88
Upside
Estimating the potential upside or downside of Paychex helps investors to forecast how Paychex stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Paychex more accurately as focusing exclusively on Paychex's fundamentals will not take into account other important factors:
Earnings
Estimates (10)
LowProjected EPSHigh
3.613.633.68
Details
Hype
Prediction
LowEstimated ValueHigh
121.45123.17124.89
Details
Potential
Annual Dividend
LowIncome Per ShareHigh
1.831.881.93
Details
16 Analysts
Consensus
LowTarget PriceHigh
94.00124.28145.00
Details
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Paychex's intrinsic value based on its ongoing forecasts of Paychex's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Paychex's closest peers. When choosing an evaluation method for Paychex, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Paychex Investments

51.45 Million

Paychex Valuation Drivers Correlation

Many accounts on the financial statements of Paychex are highly interrelated and sometimes correlated. Consequently, when conducting Paychex's valuation analysis, one should examine all of the accounts reported to obtain a complete picture of its financial situation. We provide a unique feature to present a conventional correlation table purposely composed against different valuation-related drivers of Paychex
Click cells to compare fundamentals

Paychex Valuation Trend

Knowing Paychex's actual value is paramount for traders to make sound investment determinations. Paychex's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Paychex's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Paychex's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Paychex Market Cap

Paychex is considered to be number one stock in market capitalization category among related companies. Market capitalization of Staffing & Employment Services industry is at this time estimated at about 264.12 Billion. Paychex retains roughly 44.41 Billion in market capitalization claiming about 17% of equities listed under Staffing & Employment Services industry.
Capitalization  Revenue  Total debt  Valuation  Workforce

Paychex Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Paychex's current stock value. Our valuation model uses many indicators to compare Paychex value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Paychex competition to find correlations between indicators driving Paychex's intrinsic value. More Info.
Paychex is considered to be number one stock in five year return category among related companies. It is considered to be number one stock in price to earning category among related companies reporting about  11.21  of Price to Earning per Five Year Return. Price to Earnings Ratio is likely to drop to 32.14 in 2022. Earnings Before Interest Taxes and Depreciation Amortization EBITDA is likely to drop to about 1.6 B in 2022. Comparative valuation analysis is a catch-all model that can be used if you cannot value Paychex by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Paychex's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Paychex's earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Paychex's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Paychex and how it compares across the competition.

About Paychex Valuation

The stock valuation mechanism determines the current worth of Paychex on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Paychex. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Paychex based exclusively on its fundamental and basic technical indicators. By analyzing Paychex's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Paychex's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Paychex. We calculate exposure to Paychex's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Paychex's related companies.
Fiscal Year End
May
Industry
Staffing & Employment Services
Concentration
Data Processing & Outsourced Services
Full Time Employees
16 K
Service Category
IT Services
Employer Id Number
16-1124166
Last ReportedProjected for 2022
Gross ProfitB2.7 B
Profit Margin 30.20  26.85 
Paychex's stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Paychex's value is low or high relative to the company's performance and growth projections. Determining the market value of Paychex can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Paychex represents a small ownership stake in the entity. As a stockholder of Paychex, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Paychex Dividends Analysis For Valuation

Dividend Yield is likely to rise to 0.0272 in 2022, whereas Payment of Dividends and Other Cash Distributions is likely to drop (802.9 M) in 2022. . Paychex Earnings per Basic Share are fairly stable at the moment as compared to the past year. Paychex reported Earnings per Basic Share of 3.86 in 2021. Earnings per Diluted Share is likely to rise to 4.14 in 2022, whereas Accumulated Retained Earnings Deficit are likely to drop slightly above 1.4 B in 2022.
Last ReportedProjected for 2022
Payment of Dividends and Other Cash Distributions-744.1 M-802.9 M
Dividend Yield 0.0243  0.0272 
Dividends per Basic Common Share 2.64  2.31 
There are various types of dividends Paychex can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Paychex shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Paychex directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Paychex pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Paychex by the value of the dividends paid out.

Paychex Valuation Growth Rates

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Paychex does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Quick Ratio0.55
Earnings Quarterly Growth13.70%
Revenue Growth11.40%
Payout Ratio73.05%
Enterprise Value To Ebitda21.15
Earnings Growth14.10%
Enterprise Value To Revenue9.30

Paychex Current Valuation Indicators

Valuation refers to the process of determining the present value of Paychex and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Paychex we look at many different elements of the entity such as Paychex's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Paychex's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Paychex's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Paychex, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Paychex's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Paychex's worth.
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When running Paychex price analysis, check to measure Paychex's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Paychex is operating at the current time. Most of Paychex's value examination focuses on studying past and present price action to predict the probability of Paychex's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Paychex's price. Additionally, you may evaluate how the addition of Paychex to your portfolios can decrease your overall portfolio volatility.
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Is Paychex's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Paychex. If investors know Paychex will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Paychex listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.14
Market Capitalization
44.4 B
Quarterly Revenue Growth YOY
0.11
Return On Assets
0.13
Return On Equity
0.47
The market value of Paychex is measured differently than its book value, which is the value of Paychex that is recorded on the company's balance sheet. Investors also form their own opinion of Paychex's value that differs from its market value or its book value, called intrinsic value, which is Paychex's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Paychex's market value can be influenced by many factors that don't directly affect Paychex's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Paychex's value and its price as these two are different measures arrived at by different means. Investors typically determine Paychex value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Paychex's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.