Paycom Software, Inc. (PAYC)
Quantitative Summary
DeterministicAt 16.1x earnings — a 75% discount to the sector average of 65.0x — PAYC is in the lower valuation range. Financial health is average: Piotroski 4/9, Altman Z 1.7. DCF fair value of $199 implies 66% upside from current prices based on model assumptions. Beneish M-Score of -1.55 exceeds the -2.22 academic threshold — earnings quality may warrant further review.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of Paycom Software reveal a distinct divergence between high-quality profitability metrics and operational sustainability indicators. While the DuPont decomposition highlights an impressive return on equity driven by robust net margins and moderate leverage, this strength is counterbalanced by a low asset turnover ratio that constrains overall capital efficiency. The Piotroski F-Score of 4/9 signals mixed financial health regarding balance sheet stability and earnings quality, while an Altman Z-Score of 1.8 places the company in the gray zone between safety and distress, suggesting elevated bankruptcy risk relative to peers despite a negative Beneish M-Score that hints at low manipulation probability.
Valuation metrics present a complex picture where current multiples appear depressed against historical norms but remain significantly below sector averages. Trading at a P/E of 14.1x compared to the technology sector average of 58.2x, the stock is priced for value rather than growth, yet a DCF model implying fair value suggests substantial upside potential contingent on specific free cash flow assumptions. The market appears to be pricing in modest long-term expansion with an implied ten-year FCF growth rate of only 5.7%, which may not fully capture the company's high-margin capabilities if execution improves.
Risk-adjusted performance data indicates significant underperformance relative to standard factor models, as evidenced by a negative annualized Fama-French alpha of -66.99%. This poor risk premium is exacerbated by a value factor tilt and weak profitability signals within the multi-factor framework, suggesting that traditional value strategies are currently struggling with this specific equity profile. With neutral insider flow over the last ninety days, there is no immediate signal of management conviction or distress to offset these quantitative headwinds, leaving investors to weigh the deep valuation discount against persistent operational inefficiencies and factor underperformance.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 9% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 8% | 10% | 12% |
|---|---|---|---|
| 2% | $241 | $179 | $141 |
| 3% | $281 | $199 | $153 |
| 4% | $342 | $225 | $167 |
Center = base case. Green = >10% upside, Red = >10% downside vs $144.23.
Pre-computed DCF: WACC=10.0%, terminal growth 3%. Fair value $199 (+66.0%). Not investment advice.
Valuation Context
Currently trading 40% below its 5-year average P/E of 23.6x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedThe current price of PAYC is below its 50-day moving average but significantly below the longer-term 200-day moving average, indicating a short-term uptick within an overall downward trend. The RSI at 50.3 suggests that the stock is currently trading around neutral territory in terms of momentum, neither overbought nor oversold.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-26 | $0.3750 | 0.0% |
| 2026-03-09 | $0.3750 | 0.0% |
| 2025-11-24 | $0.3750 | 0.0% |
| 2025-08-25 | $0.3750 | 0.0% |
| 2025-05-27 | $0.3750 | 0.0% |
| 2025-03-10 | $0.3750 | 0.0% |
| 2024-11-25 | $0.3750 | 0.0% |
| 2024-08-26 | $0.3750 | 0.0% |
| 2024-05-24 | $0.3750 | 0.0% |
| 2024-03-01 | $0.3750 | 0.0% |
| 2023-11-24 | $0.3750 | 0.0% |
| 2023-08-25 | $0.3750 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like CLOU or SLYV, the fund manager is mechanically forced to buy or sell PAYC shares regardless of Paycom Software, Inc.'s individual fundamentals. We estimate $721M of passive capital is structurally linked to PAYC through 8 tracked ETFs. Passive flows have a limited but growing influence on PAYC's daily trading dynamics.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Paycom Software, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Paycom Software, Inc. (PAYC) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies AKAMAI TECHNOLOGIES, INC. (AKAM) as the most exposed collateral stock, sharing 1 ETFs with PAYC. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 24 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
PAYC Ownership Dynamics
Passive funds hold 1 in every 7 PAYC shares, reducing daily market volatility.
Paycom Software, Inc. (PAYC) exerts measurable gravity on the passive index market, currently representing 3.8% of the CLOU (CLOU) and 0.8% of the SLYV (SLYV). Across 24 tracked ETFs, approximately 6M shares (13.9% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest PAYC Exposure
Float lock-up computed from 24 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
PAYC Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Paycom Software, Inc. over the past year sits near $124.78 (26% of 252-day volume). The current price of $144.23 trades 15.6% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (26% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
PAYC Capital Efficiency
How efficiently does Paycom Software, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Paycom Software, Inc. converts 50% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-13 | 61 | $137.60 | $8,393.6 |
| 2026-05-08 | 110 | $138.43 | $15,227.3 |
| 2026-05-01 | 50 | $126.76 | $6,338 |
| 2026-04-22 | 3,451 | $130.44 | $450,148.44 |
| 2026-04-10 | 134 | $114.84 | $15,388.56 |
| 2026-04-08 | 179 | $124.22 | $22,235.38 |
| 2026-04-06 | 97 | $123.56 | $11,985.32 |
| 2026-03-31 | 4 | $120.97 | $483.88 |
| 2026-03-24 | 91,288 | $126.59 | $11.6M |
| 2026-03-23 | 535,902 | $124.82 | $66.9M |
| 2026-03-17 | 3,442 | $123.47 | $424,983.74 |
| 2026-03-16 | 28,306 | $125.71 | $3.6M |
| 2026-03-12 | 10,399 | $130.33 | $1.4M |
| 2026-03-10 | 1 | $138.25 | $138.25 |
| 2026-03-09 | 20,898 | $138.01 | $2.9M |
| 2026-03-06 | 40,936 | $136.66 | $5.6M |
| 2026-03-05 | 31 | $134.11 | $4,157.41 |
| 2026-02-24 | 9,779 | $114.43 | $1.1M |
| 2026-02-13 | 988 | $119.76 | $118,322.88 |
| 2026-02-12 | 1,436 | $118.71 | $170,467.56 |
| 2026-02-05 | 46,152 | $129.84 | $6.0M |
| 2026-01-27 | 71,525 | $147.45 | $10.5M |
| 2026-01-23 | 7,088 | $152.57 | $1.1M |
| 2026-01-08 | 6,122 | $156.82 | $960,052.04 |
| 2026-01-06 | 44 | $153.00 | $6,732 |
| 2025-12-24 | 352 | $159.63 | $56,189.76 |
| 2025-12-05 | 5,112 | $166.14 | $849,307.68 |
| 2025-12-01 | 40 | $161.17 | $6,446.8 |
| 2025-11-28 | 6,733 | $160.82 | $1.1M |
| 2025-11-25 | 41 | $159.21 | $6,527.61 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| PAYX | 0.655 | 0.660 | Moderate |
| CRM | 0.610 | 0.670 | Moderate |
| ADP | 0.601 | 0.604 | Moderate |
| WDAY | 0.592 | 0.643 | Moderate |
| ADBE | 0.569 | 0.640 | Moderate |
| INTU | 0.527 | 0.618 | Moderate |
| GEN | 0.520 | 0.581 | Moderate |
| TENB | 0.518 | 0.532 | Moderate |
| NOW | 0.516 | 0.588 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare PAYC to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.