PAYX Analysis — TradeApes

PAYCHEX INC (PAYX)

Industrials

$115.20 close · Jul 21, 2026

Above 50 & 200 SMA

52W -14.8% from High

Methodology Breakdown

Triangulated across multiple voting methods. The breakdown below shows each method's output and which ones voted on the final verdict.

Method	Value	Role
DCF (Base Case)	$72.30	REFERENCE
DCF (TTM-anchored)	$111.85	REFERENCE
Peer Multiples	$68.69	REFERENCE
Earnings Power Value	$38.01	REFERENCE
Book Value Anchor	$19.36	REFERENCE
Earnings Anchor	$101.53	REFERENCE
Cash Floor	$2.19	REFERENCE
NAV Anchor	$19.36	REFERENCE

Triangulation spread: 60% across voting methods.

Health Score

Out of 100

Healthy

Pillar Scores

Financial Strength 65

Operating Trend 78

Valuation 45

Capital Allocation 55

Risk Management 70

Positives

↑ Free cash flow positive — business generates real spendable cash +2.5

↑ Strong FCF growth — free cash flow up more than 20% year over year +2.5

↑ High ROIC — above 20%, excellent return on invested capital +2.5

Concerns

↓ Above historical median — trading above its own valuation average -2.5

↓ Altman Z-Score in distress zone — mitigated by strong cash flow coverage (likely captive finance or high-leverage capital structure) -1.0

Signal contribution: +12.9 from strengths -3.5 from concerns

Health Score Trend 7 snapshots

Cross-Check: Greenblatt Magic Formula

⚠ Divergent

Earnings Yield

7.0%

Rank 347 / 1256

Return on Capital

114.1%

Rank 252 / 1256

Combined Rank

86th pctl

1256 companies ranked

Magic Formula ranks this company higher than our composite. Our lower score is likely driven by factors the Magic Formula does not assess: cash flow quality, balance sheet risk, trend momentum, or sentiment signals.

Based on Joel Greenblatt's Magic Formula methodology. Not investment advice.

Financials

TTM Financials

Revenue ?Total sales generated from the company's primary business activities over the trailing twelve months.	6.51B
Gross Profit ?Revenue minus cost of goods sold. What remains before operating expenses — reflects pricing power and production efficiency.	—
Operating Income ?Profit from core business operations after all operating expenses (EBIT). Excludes interest and taxes.	2.51B
Net Income ?Bottom-line profit after all expenses, interest, and taxes are deducted from revenue.	1.76B
Free Cash Flow ?Operating cash flow minus capital expenditures. The actual cash the business generates after maintaining its assets — the truest measure of profitability.	2.32B
EBITDA ?Earnings before interest, taxes, depreciation & amortization. A proxy for operating cash earnings that strips out accounting and financing differences.	2.95B
Total Debt ?Combined short-term and long-term interest-bearing debt obligations. Compare against cash and earnings to gauge leverage risk.	4.56B
Cash & Equivalents ?Highly liquid assets on hand — cash, money market funds, and short-term securities. The company's immediate financial cushion.	1.09B

Valuation

Market Cap	41.47B
Enterprise Value	45.01B
EV / Revenue	6.9x
EV / EBITDA	15.2x
P/E (TTM)	23.6x
Forward P/E (extrapolated)	12.9x
PEG	1.9x
P/FCF	17.9x
FCF Yield	5.6%

EV/EBITDA vs history — 63% percentile (mid-range)

CheapMidExpensive

EV/Sales vs history — 84% percentile (historically expensive)

CheapMidExpensive

P/Book vs history — 100% percentile (historically expensive)

CheapMidExpensive

DCF Fair Value Range (base CAGR: 7.4%)

Bear

$96.47

Base

$121.01

Bull

$150.82

Bear $96 Current $115.20 (in range) Bull $151

Market is pricing in 6.6% FCF growth annually — base model assumes 7.4%

Key Metrics

Gross Margin ?Gross profit as a % of revenue. Measures how efficiently the company produces its goods or services — higher is better.	—
EBITDA Margin ?EBITDA as a % of revenue. Shows core operating profitability before accounting adjustments — useful for comparing across industries.	45.3%
Net Margin ?Net income as a % of revenue. The ultimate measure of overall profitability after every expense, interest payment, and tax is accounted for.	27.0%
FCF Margin ?Free cash flow as a % of revenue. Shows how much of each dollar of revenue converts into real, spendable cash.	35.7%
Revenue Growth (YoY) ?Year-over-year change in total revenue. Measures business momentum — sustained growth above 15% is typically considered strong.	16.9%
Net Income Growth (YoY) ?Year-over-year change in net income. Shows whether profits are growing faster or slower than revenue — a key indicator of improving or deteriorating quality.	6.2%
Piotroski F-Score ?Score from 0–9 measuring financial strength across profitability, leverage, and efficiency signals. 8–9 = strong, 0–2 = distressed.	6 / 9
Altman Z-Score ?Bankruptcy risk model. Above 2.99 = safe zone, 1.81–2.99 = grey zone, below 1.81 = distress signal. Most useful for manufacturing companies.	1.55

Community Sentiment

Not enough ratings yet.
Be the first to rate this company below.

Quarterly Financials

Metric	Q4 '26	Q3 '26	Q2 '26	Q1 '26	Q4 '25	Q3 '25	Q2 '25	Q1 '25	Q4 '24	Q3 '25	Q2 '25	Q1 '25
Revenue ?Total quarterly sales from primary business operations.	1.61B	1.81B	1.56B	1.54B	1.43B	1.51B	1.32B	1.32B	1.30B	1.44B	1.26B	1.29B
Gross Profit ?Quarterly revenue minus cost of goods sold.	—	—	—	—	—	—	—	—	—	—	—	—
Operating Income ?Quarterly profit from core operations before interest and taxes (EBIT).	604.7M	792.0M	571.9M	541.9M	431.1M	691.8M	538.1M	546.7M	481.8M	649.8M	506.2M	536.3M
Net Income ?Quarterly bottom-line profit after all expenses and taxes.	420.6M	560.3M	395.4M	383.8M	297.2M	519.3M	413.4M	427.4M	379.9M	498.6M	392.7M	419.2M
FCF ?Quarterly free cash flow: operating cash minus capital expenditures.	515.0M	761.5M	382.8M	662.5M	283.3M	667.3M	248.0M	510.5M	180.4M	631.0M	270.6M	654.3M

Revenue & Free Cash Flow

Market Cap vs. DCF Fair Value Band

Shaded region = bear-to-bull DCF range. Line = actual market cap.

Want to track PAYX in your own watchlist?

Create a free account to save companies, refresh fundamentals on demand, and record your investment thesis.

Get stocks like PAYX in your inbox every Sunday

11 sector-leading stocks delivered to your inbox every Sunday. Free.

No spam. Unsubscribe anytime.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Scores and valuations are derived from SEC filings and publicly available data. Always do your own research before making investment decisions.