Paychex Earnings: Resilient SMB Market and Healthy Product Attach Underpin Strong Start to Fiscal 24

Wide-moat Paychex reported strong first-quarter fiscal 2024 results, with top-line growth exceeding our expectations and profitability broadly in line. Following the result, we have marginally lifted our full-year forecasts to the upper end of guidance, but our longer-term forecasts and $120 fair value estimate are unchanged. Paychex’s longstanding and well-respected CFO, Efrain Rivera, will retire in October 2023 and be succeeded by Vice President of Finance and Investor Relations Bob Schrader. We expect no material shift to the firm’s strategy or capital allocation on the back of this leadership change. At current prices, Paychex shares screen as fairly valued relative to our valuation.