Paychex, Inc. (PAYX) 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

+33.7%

$155.01

vs $115.92 price

Levered DCF

$166.88

After debt service

Piotroski score

7 / 9

Strong

Altman Z-score

3.27

Safe zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

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

Metric	FY2026	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019
P/E	20.91×	34.33×	25.62×	24.29×	32.08×	33.11×	23.51×	29.79×
P/B	9.84×	13.78×	11.39×	10.83×	14.47×	12.33×	9.27×	11.76×
P/S	5.65×	10.21×	8.2×	7.55×	9.68×	8.96×	6.38×	8.17×
EV / EBITDA	13.35×	24.2×	17.56×	16.56×	22×	21.83×	15.44×	19.86×
Gross margin	74.3%	72.4%	72.0%	71.0%	70.6%	68.7%	68.3%	68.8%
Operating margin	38.6%	39.6%	41.2%	40.6%	39.9%	36.0%	36.1%	36.3%
Net margin	27.0%	29.7%	32.0%	31.1%	30.2%	27.1%	27.2%	27.4%
Current ratio	1.26×	1.28×	1.37×	1.3×	1.25×	1.25×	1.23×	1.17×
Debt / equity	1.24×	1.22×	0.23×	0.25×	0.29×	0.31×	0.32×	0.31×
Interest coverage	9.32×	20.95×	58.29×	55.4×	50.27×	40.8×	37.64×	77.91×
Dividend yield	4.3%	2.5%	3.0%	3.1%	2.2%	2.5%	3.4%	2.7%
Payout ratio	90.3%	87.4%	77.8%	75.5%	71.8%	82.8%	81.0%	79.9%

Key metrics by fiscal year

Metric	FY2026	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019
Return on equity	47.1%	40.1%	44.5%	44.6%	45.1%	37.2%	39.5%	39.5%
Return on invested capital	20.4%	16.8%	32.5%	32.5%	32.1%	25.8%	27.0%	27.0%
Return on assets	10.9%	10.0%	16.3%	14.8%	14.5%	11.9%	12.8%	11.9%
Free cash flow yield	6.3%	3.1%	4.0%	4.1%	3.1%	3.2%	5.1%	3.8%
Earnings yield	4.8%	2.9%	3.9%	4.1%	3.1%	3.0%	4.3%	3.4%
Enterprise value	$40.3B	$60.3B	$42.7B	$37.5B	$45.2B	$36.3B	$25.8B	$31B
Net debt / EBITDA	1.16×	1.36×	-0.25×	-0.16×	0.25×	-0.04×	-0×	0.09×
Cash conversion cycle (days)	90	99	87	83	76	69	49	59