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Paycom Software

PAYC
82
Software - Application · Technology
Also trades as: 0KGH.L GBP 2.73 (+1.37%)
Price
$274.59
+1.98 (+0.73%)
Market Cap
$12.38B
Winston Score
82
Winston is happy
A high-quality business with solid fundamentals.
Data as of Oct 24, 2026 · filings through Jun 30, 2026

§How the score breaks down

Quality
Exceptional
30/30
Growth
Exceptional
17/20
Cash Flow
Exceptional
10/10
Stability
Strong
7/10
Valuation
Strong
7/10
Ownership
Good
10/15
Dividends
Weak
1/5

82 of 100 counted points = Winston Score 82.

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Share count falling — buybacks

−3.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 58.2M (2021) → 56.1M (2025)

§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

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

Reported EPS Growth

+47.2% YoY

Quarterly reporting periods ended:

30 Jun 2025: $1.59

30 Jun 2026: $2.34

Reported/statutory EPS, not adjusted or underlying earnings. One-off items can affect this figure. Provider rounding can affect the growth rate.

YoY Growth Rate

Reported EPS increased year over year

R&D Spend

$283M/ year

↑ Rising (+17% vs prior year)

13.8% of revenue

In line with sector average (15%)

Investing heavily in future products and technology

Insider Activity

14.7%ownership

→ Flat

Insider ownership roughly steady over the past year

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.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale
Gross Margin
83.2%
Premium pricing power — 83.2% gross margin
Profit after running costs
Operating Margin
31.7%
Excellent — 31.7% operating margin
Return on the money invested
ROCE
41.7%
Exceptional — 41.7% 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
+27.1%
Earnings growing fast (+27.1% 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
164%
Turns 164% of profit into real cash
Spare cash per sale
FCF Margin
26.7%
Converts sales into free cash efficiently (26.7%)

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
1.72
Elevated debt (1.72)
Covers its interest
Interest Cover
39.54x
Comfortably covers interest (39.5x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
29.1x
Growth-priced — P/E 29.1

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

Cheaper or dearer next year
P/E vs Forward
+7.1
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (29.1 → 22.0)

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Dividends

Dividend
Dividend Yield
0.64%
Small dividend — 0.64% yield

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

Dividend record
Dividend Growth
+0.0%
Dividend flat
Payout Ratio
16%
no trend
Pays out a modest share of profit and keeps the rest to reinvest. Room to keep paying through a weak year.

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