Paycom Software offers cloud-based human capital management software solutions delivered as Softwareas-a-Service in the United States. It provides functionality and data analytics that businesses need to manage the complete employment life-cycle from recruitment to retirement. The company was founded in 1998 and is based in Oklahoma City, Oklahoma.
PAYC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for PAYC, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Paycom Software Inc ranked in the 41th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 20%. In terms of the factors that were most noteworthy in this DCF analysis for PAYC, they are:
Interest coverage, a measure of earnings relative to interest payments, is 372.02 -- which is good for besting 98.05% of its peer stocks (US stocks in the Technology sector with positive cash flow).
The business' balance sheet suggests that 0% of the company's capital is sourced from debt; this is greater than only 2.6% of the free cash flow producing stocks we're observing.
PAYC's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 64.31% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as PAYC, try CLGX, IIIV, INTC, MTSI, and DIOD.
Paycom Software, Inc. (NYSE:PAYC), a leading provider of comprehensive, cloud-based human capital management software, today announced that the company will virtually present at Baird’s 2020 Global Consumer, Technology & Services Conference on Tuesday, June 2, 2020, at 11:25 a.m. Eastern Time.