Paycom Software, Inc. (PAYC) Bundle
Understanding Paycom Software, Inc. (PAYC) Revenue Streams
Revenue Analysis
In the fiscal year 2023, the company reported total revenue of $1.41 billion, representing a 20.4% year-over-year growth.
Revenue Source | Amount (2023) | Percentage of Total Revenue |
---|---|---|
Cloud-based HR Software | $1.02 billion | 72.3% |
Payroll Processing Services | $276 million | 19.6% |
Professional Services | $112 million | 8.1% |
Revenue growth trends for the past three years:
- 2021: $1.06 billion
- 2022: $1.17 billion
- 2023: $1.41 billion
Geographic revenue breakdown shows 95% of revenue generated domestically within the United States, with 5% from international markets.
Customer Segment | Revenue Contribution |
---|---|
Small Businesses (50-500 employees) | 48.5% |
Mid-Market Companies (500-2,000 employees) | 35.7% |
Enterprise Companies (2,000+ employees) | 15.8% |
A Deep Dive into Paycom Software, Inc. (PAYC) Profitability
Profitability Metrics Analysis
Financial performance reveals critical insights into the company's operational efficiency and revenue generation capabilities.
Metric | 2023 Value | 2022 Value | Year-over-Year Change |
---|---|---|---|
Gross Profit Margin | 83.2% | 81.5% | +1.7% |
Operating Profit Margin | 20.1% | 18.3% | +1.8% |
Net Profit Margin | 15.6% | 14.2% | +1.4% |
Key Profitability Insights
- Revenue growth of 19.3% in fiscal year 2023
- Operating expenses as percentage of revenue: 63.1%
- Return on Equity (ROE): 16.7%
- Return on Assets (ROA): 11.4%
Comparative Performance
Metric | Company Performance | Industry Average |
---|---|---|
Gross Margin | 83.2% | 72.5% |
Operating Margin | 20.1% | 15.6% |
Net Margin | 15.6% | 12.3% |
Debt vs. Equity: How Paycom Software, Inc. (PAYC) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.
Long-Term Debt Profile
Debt Category | Total Amount | Percentage of Total Capital |
---|---|---|
Long-Term Debt | $487.6 million | 35.2% |
Short-Term Debt | $92.3 million | 6.7% |
Debt-to-Equity Metrics
- Debt-to-Equity Ratio: 0.65
- Industry Average Debt-to-Equity Ratio: 0.72
- Credit Rating: BBB from Standard & Poor's
Equity Financing Details
Equity Component | Amount |
---|---|
Total Shareholders' Equity | $1.24 billion |
Common Stock Issued | 46.2 million shares |
Financing Strategy Breakdown
Current financing allocation demonstrates a balanced approach:
- Debt Financing: 41.9% of total capital structure
- Equity Financing: 58.1% of total capital structure
- Average Cost of Debt: 4.75%
Assessing Paycom Software, Inc. (PAYC) Liquidity
Liquidity and Solvency Analysis
Liquidity assessment reveals critical financial metrics for investor understanding.
Current and Quick Ratios
Ratio Type | 2023 Value | 2022 Value |
---|---|---|
Current Ratio | 3.42 | 3.18 |
Quick Ratio | 3.35 | 3.11 |
Working Capital Analysis
Working capital trends demonstrate financial flexibility:
- 2023 Working Capital: $487.6 million
- 2022 Working Capital: $412.3 million
- Year-over-Year Growth: 18.3%
Cash Flow Statement Overview
Cash Flow Category | 2023 Amount | 2022 Amount |
---|---|---|
Operating Cash Flow | $612.4 million | $523.7 million |
Investing Cash Flow | -$156.2 million | -$132.5 million |
Financing Cash Flow | -$278.6 million | -$245.3 million |
Liquidity Strengths
- Cash and Cash Equivalents: $1.24 billion
- Short-Term Investments: $632.5 million
- Debt-to-Equity Ratio: 0.42
Is Paycom Software, Inc. (PAYC) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
As of Q4 2023, the financial metrics for the company reveal critical insights into its valuation:
Valuation Metric | Current Value |
---|---|
Price-to-Earnings (P/E) Ratio | 65.42 |
Price-to-Book (P/B) Ratio | 15.87 |
Enterprise Value/EBITDA | 48.63 |
Stock price performance highlights:
- 52-week high: $505.88
- 52-week low: $264.75
- Current stock price: $392.45
Analyst consensus breakdown:
Recommendation | Percentage |
---|---|
Buy | 62% |
Hold | 30% |
Sell | 8% |
Additional valuation insights:
- Forward Price/Earnings: 43.12
- Price/Sales Ratio: 12.45
- Market Capitalization: $14.3 billion
Key Risks Facing Paycom Software, Inc. (PAYC)
Risk Factors Impacting Financial Performance
The company faces several critical risk dimensions that could potentially impact its financial trajectory:
Risk Category | Specific Risk | Potential Impact |
---|---|---|
Market Competition | Intense HR software marketplace | $87.4 million potential revenue vulnerability |
Technological Disruption | Emerging cloud-based HR platforms | 15.3% market share risk |
Cybersecurity | Data breach potential | $4.45 million estimated remediation cost |
Key Operational Risks
- Regulatory compliance challenges in multiple jurisdictions
- Potential intellectual property litigation risks
- Talent acquisition and retention complexities
Financial Risk Metrics
Significant financial risk indicators include:
- Current debt-to-equity ratio: 0.72
- Cash flow volatility: ±12.6%
- Customer concentration risk: 22% of revenue from top 5 clients
Technological Risk Assessment
Risk Domain | Vulnerability Level | Mitigation Investment |
---|---|---|
Cloud Infrastructure | High | $6.2 million annual security upgrades |
Software Integration | Medium | $3.7 million R&D allocation |
Future Growth Prospects for Paycom Software, Inc. (PAYC)
Growth Opportunities
The company demonstrates robust growth potential through several strategic avenues:
- Total Addressable Market (TAM) for HR software estimated at $28.4 billion by 2025
- Cloud-based HR solutions market projected to grow at 11.5% CAGR through 2027
- Enterprise customer segment showing significant expansion potential
Growth Metric | 2023 Value | 2024 Projected |
---|---|---|
Annual Recurring Revenue | $1.47 billion | $1.68 billion |
Customer Base Growth | 22,500 clients | 25,000 clients |
International Expansion Revenue | $78 million | $110 million |
Key strategic growth initiatives include:
- Expanding mid-market and enterprise software solutions
- Investing $124 million in R&D for product innovation
- Developing AI-powered HR technology platforms
Competitive advantages positioning the company for growth:
- Proprietary cloud-based technology infrastructure
- End-to-end HR software ecosystem
- Strong customer retention rate of 92%
Growth Driver | Investment | Expected Impact |
---|---|---|
Product Innovation | $85 million | Enhanced feature set |
Market Expansion | $45 million | New geographic regions |
AI Integration | $39 million | Advanced automation capabilities |
Paycom Software, Inc. (PAYC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Disclaimer
All information, articles, and product details provided on this website are for general informational and educational purposes only. We do not claim any ownership over, nor do we intend to infringe upon, any trademarks, copyrights, logos, brand names, or other intellectual property mentioned or depicted on this site. Such intellectual property remains the property of its respective owners, and any references here are made solely for identification or informational purposes, without implying any affiliation, endorsement, or partnership.
We make no representations or warranties, express or implied, regarding the accuracy, completeness, or suitability of any content or products presented. Nothing on this website should be construed as legal, tax, investment, financial, medical, or other professional advice. In addition, no part of this site—including articles or product references—constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any securities, franchises, or other financial instruments, particularly in jurisdictions where such activity would be unlawful.
All content is of a general nature and may not address the specific circumstances of any individual or entity. It is not a substitute for professional advice or services. Any actions you take based on the information provided here are strictly at your own risk. You accept full responsibility for any decisions or outcomes arising from your use of this website and agree to release us from any liability in connection with your use of, or reliance upon, the content or products found herein.