Paycom Earnings: Solid Close to 2024, 2025 Outlook Largely in Line With Expectations

Narrow-moat Paycom delivered strong fiscal 2024 results, however, the 2025 revenue outlook fell short of our previous expectations. We have adjusted our growth assumptions to factor in the new guidance, along with increased competition in the industry, and we are reducing our fair value estimate to $211 from $220. Fourth-quarter results surpassed the high end of both our estimates and management’s guidance, as Paycom focused on organic sales growth and operational efficiency gains through internal artificial intelligence automations. We continue to believe the business benefits from high customer switching costs and is well placed to take a further share of the expansive payroll human capital management market, even as competition increases throughout the industry. We view shares as fairly valued at Feb. 13’s price.