Paychex Inc
PAYX
Services-Engineering, Accounting, Research, Management
Mkt Cap
$43.3BPE
26.07Debt
$817.3MCash
$4.533BEV
$39.58BFCF
$1.919BP/E Ratio
26.07Debt
$817.3MCash
$4.533BEV
$39.58BFCF
$1.919BCharts data: {"Earnings":[{"time":"2015-05-30","value":674900000},{"time":"2016-05-30","value":756800000},{"time":"2017-05-30","value":817300000},{"time":"2018-05-30","value":933700000},{"time":"2019-05-30","value":1034400000},{"time":"2020-05-30","value":1098100000},{"time":"2021-05-30","value":1097500000},{"time":"2022-05-30","value":1392800000},{"time":"2023-05-30","value":1557300000}],"Sales":[{"time":"2015-05-30","value":2739600000},{"time":"2016-05-30","value":2951900000},{"time":"2017-05-30","value":3151300000},{"time":"2018-05-30","value":3380900000},{"time":"2019-05-30","value":3772500000},{"time":"2020-05-30","value":4040500000},{"time":"2021-05-30","value":4056800000},{"time":"2022-05-30","value":4611700000},{"time":"2023-05-30","value":5007100000}],"Net Margins":[{"time":"2015-05-30","value":0.24634983209227623},{"time":"2016-05-30","value":0.25637724855178023},{"time":"2017-05-30","value":0.2593532827721893},{"time":"2018-05-30","value":0.2761690674080866},{"time":"2019-05-30","value":0.2741948310139165},{"time":"2020-05-30","value":0.2717732953842346},{"time":"2021-05-30","value":0.27053342535988956},{"time":"2022-05-30","value":0.30201444152915413},{"time":"2023-05-30","value":0.3110183539374089}],"Assets":[{"time":"2015-05-30","value":6482500000},{"time":"2016-05-30","value":6440800000},{"time":"2017-05-30","value":6833700000},{"time":"2018-05-30","value":7463700000},{"time":"2019-05-30","value":8676000000},{"time":"2020-05-30","value":8550700000},{"time":"2021-05-30","value":9227200000},{"time":"2022-05-30","value":9635200000},{"time":"2023-05-30","value":10546400000}],"Stockholders Equity":[{"time":"2015-05-30","value":1785500000},{"time":"2016-05-30","value":1911700000},{"time":"2017-05-30","value":1955300000},{"time":"2018-05-30","value":2024500000},{"time":"2019-05-30","value":2619500000},{"time":"2020-05-30","value":2781400000},{"time":"2021-05-30","value":2948000000},{"time":"2022-05-30","value":3085200000},{"time":"2023-05-30","value":3493200000}],"ROE":[{"time":"2015-05-30","value":0.3779893587230468},{"time":"2016-05-30","value":0.3958780143327928},{"time":"2017-05-30","value":0.4179921239707462},{"time":"2018-05-30","value":0.46120029636947396},{"time":"2019-05-30","value":0.3948845199465547},{"time":"2020-05-30","value":0.39480117926224206},{"time":"2021-05-30","value":0.3722862957937585},{"time":"2022-05-30","value":0.45144561130558797},{"time":"2023-05-30","value":0.44580900034352455}],"ROA":[{"time":"2015-05-30","value":0.16351716158889318},{"time":"2016-05-30","value":0.1787200347782884},{"time":"2017-05-30","value":0.18215607942988424},{"time":"2018-05-30","value":0.17365381781154118},{"time":"2019-05-30","value":0.1580567081604426},{"time":"2020-05-30","value":0.170804729437356},{"time":"2021-05-30","value":0.15830371076816369},{"time":"2022-05-30","value":0.19096645632680173},{"time":"2023-05-30","value":0.19420845027687172}]}
Paychex, Inc. provides integrated human capital management solutions for human resources (HR), payroll, benefits, 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. The company also provides HR solutions, including payroll, employer compliance, HR and employee benefits administration, risk management outsourcing, and the on-site availability of a professionally trained HR representative; and retirement services administration, including plan implementation, ongoing compliance with government regulations, employee and employer reporting, participant and employer online access, electronic funds transfer, and other administrative services. In addition, it offers cloud-based HR administration software products for employee benefits management and administration, time and attendance, digital communication solutions, recruiting, and onboarding solutions; plan administration outsourcing and state unemployment insurance services; various business services to small to medium-sized businesses comprising payroll funding and outsourcing services, which include payroll processing, invoicing, and tax preparation; and payment processing services, financial fitness programs, and a small-business loan resource center. Further, the company provides insurance services for property and casualty coverage, such as workers' compensation, business-owner policies, cyber security protection, and commercial auto, as well as health and benefits coverage, including health, dental, vision, and life. It markets and sells its services primarily through its direct sales force. The company was founded in 1971 and is headquartered in Rochester, New York.
Sector
DCF
Discounted Cash Flow Valuation of Paychex Inc
Value
Growth
%
%
Discount
%
%
Multiple
| g\r | +10% | +11% | +12% | +13% | +14% |
|---|---|---|---|---|---|
| 0% | 10 | 9 | 8 | 8 | 7 |
| +1% | 11 | 10 | 9 | 8 | 8 |
| +2% | 13 | 11 | 10 | 9 | 8 |
| +3% | 14 | 13 | 11 | 10 | 9 |
| +4% | 17 | 14 | 12 | 11 | 10 |
| Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FCF | $1.919B | $2.091B | $2.269B | $2.453B | $2.64B | $2.83B | $3.022B | $3.213B | $3.401B | $3.586B | $3.766B | $37.66B |
| DCF | $1.818B | $1.716B | $1.613B | $1.51B | $1.407B | $1.306B | $1.208B | $1.112B | $1.02B | $930.9M | $9.309B | |
| Value | $22.95B | |||||||||||
In the chart Earnings are multiplied by this value.
Earnings Growth 10%
Earnings Stability 97%
Competitiveness and MOAT
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
| Years | 05-2015 | 05-2016 | 05-2017 | 05-2018 | 05-2019 | 05-2020 | 05-2021 | 05-2022 | 05-2023 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Margin | 25% | 26% | 26% | 28% | 27% | 27% | 27% | 30% | 31% | 32% |
| ROA | 16% | 18% | 18% | 17% | 16% | 17% | 16% | 19% | 19% | 17% |
| ROE | 38% | 40% | 42% | 46% | 39% | 39% | 37% | 45% | 45% | 44% |
What is the average Net Margin?
The average Net Margin over the past 5 years is +28.43%.
What is the trend of Net Margin?
The trend of Net Margin over the past 5 years is +0.73%.
What is the average Return on Assets (ROA)?
The average ROA over the past 5 years is +17.43%.
What is the trend of Return on Assets (ROA)?
The trend of ROA over the past 5 years is +0.54%.
What is the average Return on Equity (ROE)?
The average ROE over the past 5 years is +42.01%.
What is the trend of Return on Equity (ROE)?
The trend of ROE over the past 5 years is +0.2%.
Safety & Stabiliy
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
| Years | 05-2015 | 05-2016 | 05-2017 | 05-2018 | 05-2019 | 05-2020 | 05-2021 | 05-2022 | 05-2023 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Debt FCF | - | - | - | 0.00 | 0.70 | 0.61 | 0.70 | 0.59 | 0.52 | 0.43 |
| Debt Equity | - | - | - | 0.00 | 0.31 | 0.29 | 0.27 | 0.26 | 0.23 | 0.22 |
| MIN | ||||||||||
| Graham Stability | - | - | - | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
What is the Debt/FCF?
The Debt/FCF trailing twelve month is 0.43.
What is the trend of Debt/FCF?
The trend of Debt/FCF over the past 5 years is 0.07.
What is the Graham’s Stability?
Graham’s Stability measure stands at 1.00.
Growth
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
| Years | 05-2016 | 05-2018 | 05-2020 | 05-2022 | Trend |
|---|---|---|---|---|---|
| Revenue | 7.8% | 8.2% | 7.4% | 8.6% | 0.18% |
| Net Income | 11% | 11% | 12% | 12% | 0.53% |
| Stockholders Equity | 9% | 12% | 7.9% | 13% | 0.47% |
| FCF | 7.8% | 6.8% | 5.8% | 13% | -0.07% |
What is the 5 year Revenue CAGR?
The Revenue CAGR over the past 5 years is +8.17%.
What is the trend of Revenue growth?
The trend of Revenue growth rate over the past 5 years is +0.18%.
What is the 5 year Earnings CAGR?
The Earnings CAGR over the past 5 years is +10.77%.
What is the trend of Earnings growth?
The trend of Earnings growth rate over the past 5 years is +0.53%.
What is the 5 year Equity CAGR?
The Equity CAGR over the past 5 years is +11.53%.
What is the trend of Equity growth?
The trend of Equity growth rate over the past 5 years is +0.47%.
What is the 5 year FCF CAGR?
The FCF CAGR over the past 5 years is +6.76%.
What is the trend of FCF growth?
The trend of FCF growth rate over the past 5 years is -0.07%.