Paycom Earnings: New Client Wins Point to Improving Outlook; Shares Attractive

We maintain our $220 fair value estimate for narrow-moat Paycom following solid top-line and bottom-line results that exceeded both the guided range and our estimates. Paycom's result was supported by new client wins, an expanding suite of automated modules, and margin improvements. Following the result, we made minor adjustments to our near-term forecasts to align with updated guidance while reiterating our longer-term outlook. Shares traded up 7% after hours toward our unchanged valuation yet remain attractive.