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Paycom Software - AI Stock Analysis
Analysis generated February 12, 2025
Paycom Software Inc. (NYSE: PAYC) is a cloud-based software provider, offering human capital management (HCM) solutions to help businesses efficiently manage their workforce and payroll processes. Founded in 1998 and headquartered in Oklahoma City, Paycom has steadily grown to become a leader in the HCM space, providing clients with a comprehensive suite of products to handle talent acquisition, time and labor management, payroll, and HR management.
Fundamental Analysis
Revenue: Paycom reported revenue of $452 million for the most recent quarter, reflecting a 3.30% increase from the previous quarter and an 11.29% increase from the same quarter last year. This steady growth in revenue is a positive signal for the company's continued expansion.
Net Income: The company's net income for the last quarter was $73 million, which represents a 7.81% increase from the previous quarter. However, it is a 2.58% decrease compared to the same quarter last year. While the quarter-over-quarter growth is promising, the year-over-year decline may indicate some challenges affecting profitability.
EBITDA: Paycom's EBITDA for the last quarter was $130 million, showing an 8.85% increase from the previous quarter and a 9.99% increase from the same quarter last year. This robust growth in EBITDA suggests that the company is generating strong operational cash flow.
P/E Ratio: The current Price-to-Earnings (P/E) ratio is 24.03, which is within a normal range. This indicates that the stock is neither significantly overvalued nor undervalued by market standards.
Insider Activity: There have been some insiders selling their stock in recent months, which could be seen as a bearish signal. Investors often view insider selling with caution as it might indicate potential concerns about the company's future performance.
Technical Analysis
Current Stock Price: Paycom's stock is currently priced at $203.37, marking a 0.68% increase from a month ago and a 9.66% increase from a year ago. These increases indicate a positive short-term and long-term trend.
Simple Moving Average (SMA): The current SMA10 is $203.25, which is slightly lower than the previous SMA10 of $203.67. This might suggest a potential downward trend in price movement.
Relative Strength Index (RSI): The RSI is 43.7, indicating a neutral condition. This suggests that the stock is neither overbought nor oversold at the moment, lending to a balanced outlook on its price activity.
Alternative Data Analysis
Job Postings & Employee Sentiment: Paycom has 181 open positions, a decrease of 11% in recent months. This reduction might indicate an effort to cut costs or improve margins, which is not a particularly encouraging sign for growth.
Customer Acquisition: The company has an estimated 2.6 million visitors to its webpage, up by 13% recently. This growth in web traffic could signal increased customer interest and potential for higher conversions.
Mobile App Downloads: Paycom sees an estimate of 2,700 daily downloads of its mobile apps, without significant variations. This steady engagement suggests stable interest in their mobile offerings.
Social Media Engagement: Paycom has 13,000 followers on Instagram and 34,000 followers on Twitter, with minor fluctuations indicating a stable but not particularly growing online presence.
AI Score: According to AltIndex's AI score, Paycom Software has a score of 54, considered a hold signal. This score reflects a balanced combination of fundamental, technical, and alternative data indicators.
Conclusion
In conclusion, Paycom Software presents a mixed bag of indicators. The company has demonstrated solid revenue and EBITDA growth, although net income has seen a slight decline compared to last year. The stock price has shown both short-term and long-term positive trends, even though the technical indicators reveal a potential for a slight downturn. Additionally, while job postings have decreased, web traffic and mobile app downloads have maintained steady growth.
Based on the current analysis, it is recommended to adopt a cautious approach to Paycom Software stock. Considering the balanced AI score and insider selling, the stock might be viewed as a hold. Investors should keep an eye on future earnings reports and broader market conditions to determine the best course of action.
Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.
