PAYX

Paychex Inc

Finance/Real Estate


Presented:10/27/2015
Price:$52.24
Cap:$18.95B
Current Price:$142.30
Cap:$51.21B

Presented

Date10/27/2015
Price$52.24
Market Cap$18.95B
Ent Value$15.66B
P/E RatioN/A
Book Value$4.97
Div Yield3.08%
Shares O/S362.80M
Ave Daily Vol2,466,066
Short Int5.73%

Current

Price$142.30
Market Cap$51.21B
Paychex, Inc. provides payroll, human resource, and benefits outsourcing solutions for small to medium-sized businesses. The company offers payroll processing, payroll tax administration services, employee payment services, regulatory compliance services, Paychex HR Solutions, retirement services administration, insurance services, and eServices and other human resource services and products. It also provides comprehensive outsourcing services that allow employers to expand their employee benefits offerings at an affordable cost. It also offers a variety of business insurance products, including group health and workers' compensation through Paychex Insurance Agency, Inc. Paychex was founded by Blase Thomas Golisano in 1971 and is headquartered in Rochester, NY.

Publicly traded companies mentioned herein: Automatic Data Processing (ADP), Paychex Inc (PAYX), Paycom Software Inc (PAYC), Paylocity Holding Corporation (PCTY)

Highlights

The presenter is short shares of outsourced payroll processing and human resources solutions (HRS) provider Paychex (PAYX). The primary reasons for his bearish outlook are competition, and deceleration in both the core Payroll business and HRS segment. The deceleration in the latter can also be attributed to the dissipation of the tailwind created by the Affordable Care Act (ACA). If his assumptions prove to be accurate, PAYX shares are likely overvalued at 25x and 14.5x 2016 Street EPS and EBITDA estimates, respectively.

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Idea Discussion

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