Paychex (PAYX) Earnings Preview: What to Expect in Fiscal Q1 2026
Paychex, Inc. (PAYX), a leading provider of human capital management (HCM) solutions, is set to announce its fiscal first-quarter earnings for 2026 before the market opens on Tuesday, September 30th. Analysts are closely watching the results for insights into the company's performance and the overall economic landscape.
Earnings Expectations
Analysts anticipate PAYX will report a profit of $1.21 per share on a diluted basis, a 4.3% increase from the $1.16 per share reported in the same quarter last year. The company has a strong track record, consistently exceeding Wall Street's EPS estimates in its last four quarterly reports. For the full fiscal year, analysts expect EPS of $5.45, a 9.4% rise from $4.98 in fiscal 2025, and further growth to $5.85 in fiscal 2027, representing a 7.3% year-over-year increase.
Revenue Projections
The consensus estimate for Paychex’s first-quarter fiscal 2026 revenues is $1.5 billion, indicating a 16.6% increase from the same quarter last year. This growth is expected to be driven by strong performance in key segments. Specifically, revenues from Management Solutions are estimated at $1.1 billion, a 20.2% year-over-year increase, aided by the addition of Paycor and higher revenues per client through price realization and product penetration. PEO and insurance solution revenues are projected to reach $339 million, a 6.2% increase, fueled by robust growth in the number of average PEO worksite employees.
Analyst Sentiment and Stock Performance
Despite positive earnings expectations, PAYX stock has underperformed the S&P 500 Index and the Technology Select Sector SPDR Fund over the past 52 weeks. As of June 25th, PAYX shares closed down more than 9% after the Q4 results announcement, even though its adjusted EPS of $1.19 and revenue of $1.43 billion surpassed Wall Street forecasts. The current analyst consensus opinion is cautious, with a “Hold” rating. The average analyst price target is $147.42, suggesting a potential upside of 16.4% from current levels.
Cramer's Perspective
According to Jim Cramer, earnings from Paychex will be an important indicator of the state of the economy, particularly for small and medium-sized businesses. He highlights Paychex as a solid metric to watch, alongside other key earnings reports and economic data released this week.
Key Factors to Watch
- Management Solutions Revenue: Monitor the impact of Paycor's addition and price realization strategies.
- PEO and Insurance Solutions: Focus on the growth in the number of average PEO worksite employees.
- Earnings Surprise: While Paychex has consistently surpassed estimates, its Zacks Rank suggests caution this quarter.
| Metric | Q1 2026 Estimate | Year-over-Year Change |
|---|---|---|
| EPS (Diluted) | $1.21 | 4.3% |
| Revenue | $1.5 Billion | 16.6% |
Investors will be paying close attention to Paychex's earnings report to gauge the health of small and medium-sized businesses and the broader economy. The company's performance in key segments and its ability to maintain its track record of exceeding expectations will be critical factors in determining its stock's future trajectory.
