Paycom Software, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Investors in Paycom Software, Inc. (NYSE:PAYC) had a good week, as its shares rose 3.5% to close at US$137 following the release of its first-quarter results. Revenues were US$572m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$3.04, an impressive 23% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the most recent consensus for Paycom Software from 19 analysts is for revenues of US$2.19b in 2026. If met, it would imply a satisfactory 4.6% increase on its revenue over the past 12 months. Statutory earnings per share are expected to reduce 7.1% to US$9.36 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.19b and earnings per share (EPS) of US$8.51 in 2026. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

See our latest analysis for Paycom Software

There's been no major changes to the consensus price target of US$151, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Paycom Software, with the most bullish analyst valuing it at US$195 and the most bearish at US$120 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Paycom Software shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Paycom Software's revenue growth is expected to slow, with the forecast 6.1% annualised growth rate until the end of 2026 being well below the historical 16% p.a. growth over the last five years. Compare this to the 148 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.7% per year. Factoring in the forecast slowdown in growth, it looks like Paycom Software is forecast to grow at about the same rate as the wider industry.

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The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Paycom Software following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$151, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Paycom Software analysts - going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Paycom Software that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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