Paychex (NASDAQ:PAYX) Issues Earnings Results

Paychex (NASDAQ:PAYX) issued its quarterly earnings data on Friday. The business services provider reported $1.26 earnings per share for the quarter, topping the consensus estimate of $1.23 by $0.03, Zacks reports. Paychex had a net margin of 27.85% and a return on equity of 45.17%. The business had revenue of $1.56 billion during the quarter, compared to the consensus estimate of $1.55 billion. During the same quarter in the previous year, the firm earned $1.14 EPS. The company’s revenue was up 18.3% compared to the same quarter last year. Paychex updated its FY 2026 guidance to 5.480-5.530 EPS.

Here are the key takeaways from Paychex’s conference call:

• Delivered a strong Q2 with revenue up 18% to $1.6B, adjusted operating income +21%, adjusted diluted EPS up 11% to $1.26, and margin expansion driven by higher productivity.
• Paycor integration progressing — management now expects about $100 million in FY2026 cost synergies (up from $80M), says revenue-synergy targets are on track and Paycor contributed roughly 17 percentage points to management solutions growth.
• Accelerating AI initiatives: announced a patent-pending AI-powered Knowledge Mesh, launched GenAI compliance tools, and ran agentic AI pilots that autonomously handled thousands of payroll interactions with nearly 100% accuracy, which management expects will improve productivity, margins, and sales effectiveness.
• Reaffirmed FY2026 outlook but now expects revenue to land toward the low end of ranges for Management Solutions, PEO, and insurance; meanwhile raised adjusted diluted EPS guidance to 10–11% and expects interest on client funds at the high end of $190–$200M.
• PEO business showing strength with mid-single-digit worksite employee growth, solid retention and enrollment trends, but the insurance agency was a headwind this quarter due to weak workers’ comp rates and lower health/benefit volumes.

Paychex Stock Performance

Shares of PAYX stock opened at $112.28 on Friday. The stock’s 50-day moving average price is $116.08 and its 200 day moving average price is $131.99. The company has a quick ratio of 1.27, a current ratio of 1.27 and a debt-to-equity ratio of 1.15. The stock has a market capitalization of $40.41 billion, a PE ratio of 25.23 and a beta of 0.91. Paychex has a 52-week low of $108.00 and a 52-week high of $161.24.

Paychex Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, November 26th. Investors of record on Friday, November 7th were given a $1.08 dividend. This represents a $4.32 annualized dividend and a yield of 3.8%. The ex-dividend date was Friday, November 7th. Paychex’s payout ratio is 97.08%.

Analyst Ratings Changes

A number of brokerages recently weighed in on PAYX. Cowen reissued a “hold” rating on shares of Paychex in a research report on Monday, December 1st. Wolfe Research cut their target price on Paychex from $130.00 to $115.00 and set an “underperform” rating on the stock in a research report on Wednesday, December 10th. Argus reduced their target price on Paychex from $170.00 to $150.00 in a report on Thursday, October 2nd. UBS Group decreased their target price on Paychex from $140.00 to $132.00 and set a “neutral” rating for the company in a research report on Thursday, October 2nd. Finally, Morgan Stanley lifted their price target on Paychex from $132.00 to $133.00 and gave the stock an “equal weight” rating in a research report on Monday, October 20th. Fourteen investment analysts have rated the stock with a Hold rating and three have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Reduce” and a consensus target price of $130.60.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the stock. Wealth Watch Advisors INC purchased a new stake in shares of Paychex during the third quarter worth approximately $42,000. Darwin Wealth Management LLC acquired a new position in Paychex in the 2nd quarter valued at $83,000. Triumph Capital Management purchased a new position in Paychex during the 3rd quarter worth $76,000. MUFG Securities EMEA plc purchased a new position in Paychex during the 2nd quarter worth $137,000. Finally, Blue Chip Partners LLC acquired a new stake in shares of Paychex in the 2nd quarter worth $200,000. Institutional investors and hedge funds own 83.47% of the company’s stock.

Key Headlines Impacting Paychex

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: Q2 results beat expectations — EPS of $1.26 topped estimates and revenue rose 18.3% year-over-year, driven by management solutions and the recent Paycor contribution. Paychex Q2 Earnings & Revenues Surpass Estimates
• Positive Sentiment: Paycor acquisition helping scale revenue and lift the company’s profit outlook, supporting the stronger top-line and the raised FY26 EPS range. Paychex Scales Fast After Paycor Acquisition
• Positive Sentiment: Company raised FY2026 EPS guidance to $5.48–$5.53, slightly above consensus, signaling management confidence in earnings power despite near-term costs. Paychex Reports Second Quarter Results
• Neutral Sentiment: Analysts were active ahead of the release, with some revisions to estimates — reflecting varied views on growth durability and integration risk. Analysts Revise Forecasts Ahead Of Earnings
• Neutral Sentiment: Some brokerages remain cautious (example: Stifel maintained a hold), keeping a range of opinions on valuation and growth vs. execution risk. Stifel Maintains Hold
• Negative Sentiment: Higher quarterly expenses (integration, amortization, or operating costs) were highlighted as offsetting some of the upside and tempered investor reaction to the guidance raise. Reuters: Higher Quarterly Expenses Overshadow Forecast Raise

Paychex Company Profile

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.