Paycom Software

PAYC

Software - Application · Technology

Also trades as: 0KGH.L

Winston Score

Winston is happy

A high-quality business with solid fundamentals.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Exceptional

Growth

Exceptional

Cash Flow

Exceptional

Stability

Weak

Valuation

Strong

Dividends

Weak

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Winston Score History

The full picture

Paycom Software makes software that helps businesses manage their employees. Its main product is a cloud-based platform that handles payroll, hiring, scheduling, time tracking, and benefits — all in one place. The company sells primarily to mid-sized U.S. businesses across many industries, competing in the human capital management (HCM) software space alongside companies like ADP and Paychex.

Paycom charges businesses a recurring subscription fee based on the number of employees using the platform. It operates almost entirely in the United States, generating roughly $1.7 billion in annual revenue. Its competitive edge comes from having everything built on a single database, which makes it easier to use than systems stitched together from multiple products. The key growth challenge ahead is that Paycom's newer self-service payroll tool, Beti, shifts work away from HR teams and onto employees, which has slowed client expansion as some customers need less hands-on support than before.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+9.8% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+49.7% YoY

YoY Growth Rate

EPS growth accelerating

Insider Activity

14.7%ownership

↓ Declining

Insider ownership declining — could be dilution or selling

Cash Position

Cash flow positive

$198M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Paycom Software is growing revenue at 10% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

88.3%

Premium pricing power — 88.3% gross margin

Profit after running costs

Operating Margin

31.7%

Excellent — 31.7% operating margin

Return on the money invested

ROCE

44.1%

Exceptional — 44.1% return on capital

ROIC above 25%. Every dollar invested in the business earns more than 25 cents back per year.

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Growth

Sales growth

Sales YoY

+9.2%

Steady sales growth (+9.2% YoY)

Profit growth

EPS YoY

+27.6%

Earnings growing fast (+27.6% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is

EPS Consistency

7/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Profit that turns into cash

Cash Conversion

208%

Turns 208% of profit into real cash

Spare cash per sale

FCF Margin

35.2%

Converts sales into free cash efficiently (35.2%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

1.57

Elevated debt (1.57)

Covers its interest

Interest Cover

N/A

Data not available

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Valuation

Price vs profit

P/E Ratio (TTM)

24.3x

no trend

Growth-priced — P/E 24.3

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year

P/E vs Forward

+6.6

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (24.3 → 17.7)

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Dividends

Dividend

Dividend Yield

0.71%

no trend

Small dividend — 0.71% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record

Dividend Growth

+0.0%

no trend

Dividend flat

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