PAYC - Embedded Expectations Analysis - 2020 09 14
Paycom Software, Inc. (PAYC:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 65.7x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about demand and volumes, advertising costs, and the overall business momentumSpecifically, management may be concerned about the impact of interest rate cuts on their recurring revenue and increasing the size of their inside sales team. Moreover, they may lack confidence in their ability to execute their advertising investments and manage advertising costs. Furthermore, they may have concerns about the sustainability of strong demand and elevated lead volumes, and about how unemployment affects their business and guidance. In addition, they may be exaggerating the benefits of face-to-face worker relationships and their ability to turn product demonstrations into appointments. Finally, management may lack confidence in their ability to continue automating their products and maintain business momentum
Paycom Software is a provider of cloud-based human capital management (HCM) solution delivered as Software-as- a-Service. The company provides functionality and data analytics that businesses need to manage the complete employment lifecycle, from recruitment to retirement. The company's solution requires virtually no customization and is based on a core system of record maintained in a single database for various HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources management applications. The company's solution was developed in-house and is based on a single platform, there is no need to integrate, update or access various databases.
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