Paychex stock is waiting for a shift in analyst attention
When we last looked at payroll professionals Paychex, Inc. (NASDAQ: PAYX) The stock was fresh from a Record high from quarterly top line beat. It’s that time again for the company preparing to report quarterly results before the market opens on Tuesday April 6th. Paychex has managed to beat earnings expectations in all four of its most recent earnings reports.
For the third quarter of fiscal 2020, Paychex beat analysts’ estimates by a margin of $ 0.02 and reported earnings per share (EPS) of $ 0.97. For the fourth quarter of fiscal 2020, the company cut its earnings per share to $ 0.61 but beat expectations with a margin of $ 0.01. For the following quarter, Paychex posted earnings spike that rose to $ 0.63 per share, beating estimates by $ 0.08. In its latest quarterly report, Paychex announced earnings per share of $ 0.73, beating expectations by $ 0.07.
Due to a number of mitigating factors, AYX’s last three post-profit responses have been negative, including a 4.9% decline in July. For the past eight quarters, regardless of direction, the stock has seen an average post-earnings move of 2.2%. This time for next Wednesday the options market expects an above-average movement after the gain of 3.5%.
PAYX stock price rose nearly 70% year over year when the stock hit a 52-week low of $ 58.85. Additionally, Paychex’s share price is up 10% since the start of the year. Recently, PAYX stocks hit a 52-week high of $ 101.01. Paychex also offers shareholders a forward dividend of $ 2.48 and a dividend yield of 2.47%.
Paychex stock hit a record high of $ 101.01 on March 26, but has since moved into triple digits. Up 54% over the past 12 months, the stock is overdue for a round of bull notes considering nine out of eleven in the PAYX coverage rate are a “hold” or worse.
Paychex’s total revenue for the past twelve months is now $ 3.98 billion. The company has increased its net income by approximately $ 240 million, or 30%, since fiscal 2017, totaling $ 1.06 billion last year. Like revenue, Paychex’s net income was down slightly from the company’s 2020 fiscal year report. Overall, given the dividend and steady growth rate, Paychex stock could be a solid long-term option. However, investors should be wary of the company’s high valuation. PAYX is currently trading at a price-earnings-ratio of 33.87 and the Paychex share with a price-earnings-ratio of 32.15.