Paychex, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Hold Paychex.
Q1 FY2027 revenue growth decelerated sharply to 5.9% YoY from FY2026's 16.9%, suggesting the prior year's acceleration was largely acquisition-driven and that organic momentum is now settling into a lower gear. The balance sheet carries $4.63B in total debt against $3.74B in equity (as of fiscal year ended 31 May), insiders have been net sellers with $25.6M in dispositions over 24 months including a $56.2M September sale by founder Golisano, and the stock at $104.46 remains below its 50-day MA of $115.79 despite stabilizing after a 14% drawdown. Durable 35.7% FCF margins, a PE of 20.7 trading roughly 16% below the peer median, and four straight EPS beats support holding, but decelerating growth quality and persistent insider selling argue against adding exposure here.
What could go wrong
- Growth deceleration persists. Q1 FY2027 revenue growth of 5.9% YoY is a sharp step-down from FY2026's 16.9% and the 19.9% posted in Q3 FY2026; if organic growth fails to re-accelerate, the multiple compresses further.
- Leverage and dividend sustainability. Total debt of $4.63B against $3.74B in equity as of fiscal year ended 31 May, up from $866M in FY2024, raises questions about how much cash flow is committed to debt service and payouts.
- Insider distribution continues. Net insider disposition of $25.6M over 24 months, including a $56.2M Golisano sale in September 2026, signals that the largest shareholder is trimming near recent lows.
- Labor market softness hits SME demand. Recent news highlighting a cooling labor market and ADP's payroll headwinds point to cyclically weaker small-business hiring, which directly affects PAYX's core payroll and HR Services volumes.
What would change my mind
Where this comes from: Q1 FY27 results and fundamentals · FY26 fundamentals · insider trades · peer comparison and technicals, 8 Oct. Orin's read on PAYX; not advice.
How has the share price moved?
Down 12.6% over twelve months, from $125.01 on 27 Oct 2025 to $109.26 at the Tue 27 Oct 2026 close. Its highest close in that time was $127.34 on 31 Aug 2026; the last close is 14.2% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 11.3M, on 19 Dec 2025).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All PAYX filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $2.7B | 0.0% |
| Vanguard Capital Management | $2.1B | 0.0% |
| Vanguard Portfolio Management | $1.5B | 0.1% |
| State Street | $1.4B | 0.0% |
| Invesco | $1.3B | 0.1% |
| Charles Schwab Investment Management | $1.0B | 0.1% |
| Geode Capital Management | $1.0B | 0.1% |
| Morgan Stanley | $643.2M | 0.0% |
| Goldman Sachs Group | $454.2M | 0.0% |
| Bank of America | $434.1M | 0.0% |
105 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 196 Form 4 filings; open-market trades net −$26.5M. Of the 50 on hand, 0 were open-market purchases and 3 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about PAYX
Orin answers questions about PAYX from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 21.6× its last 12 months of profit (Tue 27 Oct close) — higher than in 1 of its last 5 fiscal years (middle 25.6×); the typical Industrials company on the NASDAQ is at 18.4×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 21.6×below usual | 25.6× | 18.4× |
| P/S | 5.89×below usual | 8.20× | — |
| EV/EBITDA | 14.0×below usual | 17.6× | — |
| P/B | 10.5×below usual | 11.4× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $111 (from $107 to $115) — 2% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$111
$107 – $115 · +2% against the last close
- 1 buy or overweight
- 10 hold
- 2 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 21.6× its last 12 months of profit; the middle P/E of the 3 companies it is compared to that made a profit is 26.7×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| PAYXPaychex, Inc. | $39B | 21.6× | 14.0× | 74.4% | 27.4% | 47% |
| ADPAutomatic Data Processing, Inc. | $116B | 26.7× | 18.2× | 48.2% | 20.1% | 70% |
| BBSIBarrett Business Services, Inc. | $737M | 23.7× | 10.9× | 19.3% | 2.4% | 15% |
| NSPInsperity, Inc. | $2B | lost money | 34.0× | 12.8% | −0.2% | −25% |
| WDAYWorkday, Inc. | $50B | 41.5× | 31.5× | 75.8% | 12.3% | 17% |
- NSP: lost money over the last 12 months, so no P/E.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 21.6× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now21.6×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NASDAQ were priced at a typical 18.4× their yearly profit (Tue 27 Oct close).
- Now18.4×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $151 a share — 37% above the $110.53 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $151 | 37% above $110.53 |
| Levered | $163 | 47% above $110.53 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.