PayChex stock rallies after revenue tops expectations, profit growth outlook beats forecasts

Shares of Paychex Inc. (PAYX) jumped 1.4% in premarket trading Thursday, after the human resources services provider reported fiscal fourth-quarter profit that matched expectations while revenue topped, and provided an upbeat full-year outlook. Net income for the quarter to May 31 rose to $350.4 million, or 97 cents a share, from $296.4 million, or 82 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 97 cents matched the FactSet consensus. Total revenue grew 7.5% to $1.230 billion, above the FactSet consensus of $1.221 billion, as management solutions revenue rose 7% to $905.2 million and Professional Employer Organization revenue increased 5% to $299.5 million. For fiscal 2024, the company expects adjusted EPS to be 9% to 10% above fiscal 2023 levels, while the current FactSet consensus of $4.60 implies 7.5% growth. The company, which had a $39.91 billion market capitalization as of Wednesday's close, expects revenue to rise 6% to 7%, while the FactSet consensus of $5.31 billion implies 6.1% growth. The stock has slipped 4.2% year to date through Wednesday while the S&P 500 has gained 14.0%.

-Tomi Kilgore

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06-29-23 0845ET

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