Paycom Software, Inc. (PAYC) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-19.4%

$220.02

vs $272.83 price

Levered DCF

$202.53

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

3.13

Safe zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	19.6×	22.95×	34.98×	63.85×	122.47×	181.63×	84.32×	51.45×
P/B	5.14×	7.31×	9.16×	15.2×	26.89×	39.75×	28.94×	21.11×
P/S	4.33×	6.12×	7.04×	13.07×	22.77×	30.97×	20.66×	12.48×
EV / EBITDA	10.86×	14.03×	19.91×	36.31×	73.59×	108.38×	56.23×	34.39×
Gross margin	83.2%	82.2%	83.7%	84.5%	84.7%	85.3%	85.1%	84.0%
Operating margin	27.6%	33.7%	26.6%	27.5%	24.0%	22.1%	30.7%	30.7%
Net margin	22.1%	26.7%	20.1%	20.5%	18.6%	17.0%	24.5%	24.2%
Current ratio	1.09×	1.1×	1.11×	1.16×	1.13×	1.09×	1.07×	1.03×
Debt / equity	0.09×	0.05×	0.06×	0.02×	0.03×	0.05×	0.06×	0.1×
Interest coverage	166.82×	186.56×	237.53×	151.48×	0×	9,795.95×	240.66×	226.78×
Dividend yield	1.0%	0.7%	0.5%	0.0%	0.0%	0.0%	0.0%	0.0%
Payout ratio	18.7%	16.9%	19.0%	0.0%	0.0%	0.0%	0.0%	0.0%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	26.2%	31.9%	26.2%	23.8%	21.9%	21.9%	34.3%	40.9%
Return on invested capital	18.4%	24.9%	19.4%	17.9%	15.8%	16.1%	24.6%	27.5%
Return on assets	6.0%	8.6%	8.1%	7.2%	6.1%	5.5%	7.3%	9.0%
Free cash flow yield	4.6%	3.0%	2.4%	1.3%	0.8%	0.5%	0.9%	1.8%
Earnings yield	5.1%	4.4%	2.9%	1.6%	0.8%	0.6%	1.2%	1.9%
Enterprise value	$8.7B	$11.2B	$11.7B	$17.6B	$23.8B	$25.9B	$15.1B	$7.1B
Net debt / EBITDA	-0.27×	-0.4×	-0.37×	-0.77×	-0.77×	-0.5×	-0.38×	-0.06×
Cash conversion cycle (days)	17	-15	-9	-17	-2	-8	-6	-17