Paycom (PAYC) Stock Performance Compared to Peers in the HR Software Sector
Paycom Software, Inc. (PAYC), a cloud-based human capital management (HCM) provider with a market cap of $12.7 billion, is under scrutiny as its stock performance is compared to its peers in the HR software industry. The company offers a comprehensive platform integrating payroll, HR, talent management, and time tracking solutions, primarily targeting small to mid-sized businesses. This article will analyze Paycom's recent performance against industry benchmarks and competitors.
Paycom's Market Position and Recent Performance
As a large-cap stock, Paycom has experienced both positive and negative trends. While it has dipped 18.8% from its 52-week high, it reported strong Q2 2025 results, exceeding expectations with an adjusted EPS of $2.06 and revenue of $483.6 million. The company also raised its full-year revenue guidance, reflecting investor enthusiasm for its AI-driven features designed to streamline HR processes.
- Year-to-date (YTD), Paycom's stock has risen 6.1%.
- Over the past 52 weeks, shares of PAYC have increased 25.2%.
- The stock has been trading below its 50-day and 200-day moving averages since mid-June and early September, respectively.
Despite these gains, PAYC's stock has underperformed the SPDR S&P Software & Services ETF (XSW) over the past three months, rising only 6.1% compared to XSW's 6.7% rise during the same period. However, over a 52-week period the ETF's rose 26.1% trailing slightly behind PAYC at 25.2%.
Paycom vs. Its Competitors: A Q2 Analysis
A review of HR software stocks following Q2 earnings season reveals varying performances. While the group as a whole saw revenues beat analyst expectations by 0.5%, next quarter's revenue guidance was 2.7% below estimates. On average, share prices in this sector have declined 2.2% since their latest earnings reports.
In contrast to Paychex (PAYX), which experienced a disappointing quarter, Paycom's Q2 was considered strong, with the company outperforming analysts' revenue expectations by 2.5%. The business demonstrated impressive EBITDA estimates and full-year guidance exceeded analysts' expectations. Despite these positive results, the market reacted negatively, with PAYC's stock decreasing 2.4% since reporting.
Comparative Analysis with Other HR Software Companies
Other key players in the HR software space include Asure Software (ASUR), Paylocity (PCTY), and Dayforce (DAY). Each company reported varying levels of success during Q2.
- Asure Software reported a softer quarter, with revenue falling short of analyst expectations and a significant miss in billings estimates.
- Paylocity surpassed analyst revenue expectations by 3.1% and recorded a solid beat of analyst EBITDA estimates.
- Dayforce topped analyst expectations by 1.5% but logged revenue guidance for the next quarter missing analysts’ expectations.
Compared to rival Autodesk, Inc. (ADSK), which has gained 20% over the past 52 weeks, Paycom has demonstrated stronger revenue growth in Q2, highlighting the competitive dynamics within the software sector.
Analyst Ratings and Market Outlook
PAYC stock currently holds a consensus rating of "Moderate Buy" from 19 analysts, with a mean price target of $250.71, representing a potential upside of 15.3% from current market prices. The stock trades at $217.42.
Broader Market Context
The broader market context includes a cooling of inflation due to the Federal Reserve's rate hikes in 2022 and 2023. While the outlook for 2025 remains uncertain due to potential trade policy changes and corporate tax discussions, the stock market thrived in 2024, influenced by rate cuts and Donald Trump's presidential election win.
