Paychex, Inc. (NASDAQ:PAYX) Receives Average Rating of “Reduce” from Analysts

Shares of Paychex, Inc. (NASDAQ:PAYX) have earned a consensus rating of “Reduce” from the eighteen ratings firms that are covering the stock, MarketBeat reports. Four investment analysts have rated the stock with a sell rating, thirteen have given a hold rating and one has assigned a buy rating to the company. The average 12-month target price among analysts that have updated their coverage on the stock in the last year is $123.9375.

PAYX has been the subject of several research analyst reports. TD Cowen restated a “hold” rating on shares of Paychex in a research note on Monday, December 1st. Royal Bank Of Canada reduced their target price on Paychex from $150.00 to $125.00 and set a “sector perform” rating for the company in a report on Friday, December 5th. Weiss Ratings reissued a “hold (c)” rating on shares of Paychex in a research report on Monday, December 29th. Stephens cut their price target on Paychex from $135.00 to $125.00 and set an “equal weight” rating on the stock in a research report on Monday, December 22nd. Finally, Morgan Stanley reduced their price objective on Paychex from $133.00 to $123.00 and set an “equal weight” rating for the company in a research note on Monday, December 22nd.

Institutional Trading of Paychex

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Capital International Investors increased its holdings in shares of Paychex by 59.1% in the fourth quarter. Capital International Investors now owns 30,265,174 shares of the business services provider’s stock valued at $3,395,583,000 after purchasing an additional 11,243,295 shares during the period. Vanguard Group Inc. grew its position in Paychex by 17.2% in the 3rd quarter. Vanguard Group Inc. now owns 37,765,468 shares of the business services provider’s stock valued at $4,787,151,000 after buying an additional 5,549,511 shares during the last quarter. Federated Hermes Inc. grew its position in Paychex by 4,141.2% in the 4th quarter. Federated Hermes Inc. now owns 2,409,229 shares of the business services provider’s stock valued at $270,267,000 after buying an additional 2,352,423 shares during the last quarter. Norges Bank acquired a new position in Paychex in the 4th quarter valued at $257,699,000. Finally, Voloridge Investment Management LLC purchased a new position in Paychex during the 3rd quarter worth $117,809,000. 83.47% of the stock is owned by hedge funds and other institutional investors.

Paychex Stock Down 1.2%

PAYX stock opened at $91.24 on Wednesday. The company has a current ratio of 1.27, a quick ratio of 1.27 and a debt-to-equity ratio of 1.17. Paychex has a twelve month low of $90.32 and a twelve month high of $161.24. The company’s 50 day moving average is $106.38 and its two-hundred day moving average is $118.45. The stock has a market cap of $32.75 billion, a P/E ratio of 20.69 and a beta of 0.90.

Paychex (NASDAQ:PAYX) last issued its quarterly earnings data on Friday, December 19th. The business services provider reported $1.26 earnings per share for the quarter, topping the consensus estimate of $1.23 by $0.03. The business had revenue of $1.56 billion during the quarter, compared to the consensus estimate of $1.55 billion. Paychex had a net margin of 26.45% and a return on equity of 46.38%. The company’s revenue was up 18.3% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $1.14 EPS. Paychex has set its FY 2026 guidance at 5.480-5.530 EPS. Research analysts expect that Paychex will post 4.99 earnings per share for the current fiscal year.

Paychex announced that its Board of Directors has approved a share repurchase plan on Friday, January 16th that allows the company to repurchase $1.00 billion in shares. This repurchase authorization allows the business services provider to repurchase up to 2.5% of its shares through open market purchases. Shares repurchase plans are typically a sign that the company’s board believes its shares are undervalued.

Paychex Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Friday, February 27th. Investors of record on Wednesday, January 28th will be given a $1.08 dividend. The ex-dividend date is Wednesday, January 28th. This represents a $4.32 annualized dividend and a yield of 4.7%. Paychex’s dividend payout ratio is 97.96%.

About Paychex

Paychex, Inc, founded in 1971 by B. Thomas “Tom” Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company’s core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers’ compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.