PAYC - Embedded Expectations Analysis - 2021 04 05
Paycom Software, Inc. (PAYC:USA) currently trades well above corporate averages relative to UAFRS-based (Uniform) earnings, with a 63.3x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may be concerned about revenue growth, the value of their new innovations, and the demand for their employee self-service offeringSpecifically, management may lack confidence in their ability to sustain revenue growth, maintain adjusted EBITDA growth, and accelerate lead growth through their marketing strategies. In addition, they may be exaggerating the value-add of their new DDX and Manager-on-the-Go innovations and the time they save clients on manual tasks. Furthermore, management may lack confidence in their ability to focus on both growth and profitability, continue investing in the business through the pandemic, and service firms of all sizes. Finally, they may have concerns about the demand for their Better Employee Transaction Interface (BETI) offering, staffing levels of new business wins, and their stock-based compensation costs
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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