Paycom Software, Inc. provides a cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. Its platform offers payroll, talent acquisition, talent management, time and labor management, and benefits administration applications, along with data analytics covering the employment life cycle from recruitment to retirement. Additional tools include manager self-service, direct data exchange, compliance support, surveys, and communications features such as Clue and MyCom. Founded in 1998, the company is based in Oklahoma City, Oklahoma.
Paycom Leads HR Software Q2 as Paylocity, Paychex, Asure Report
Paycom posted the strongest quarter among the four HR software stocks tracked, reporting revenues of $531.2 million, up 9.8% year on year and 3.5% above analysts' expectations, with full-year EBITDA guidance exceeding estimates and a solid beat on billings. Paylocity reported revenues of $444.7 million, up 11% year on year and 3.1% ahead of expectations, delivering the highest guidance raise of the group, though its stock is down 1.1% since reporting and trades at $141.75. Asure Software reported revenues of $37.11 million, up 23.2% year on year and in line with expectations, but posted a significant miss on billings estimates and the weakest guidance update in the group, with its stock flat at $8.44. Paychex reported revenues of $1.61 billion, up 12.5% year on year and in line with expectations, with a decent beat on adjusted operating income estimates, and its stock is up 18.2% since reporting at $115.83. As a group, the four HR software stocks beat consensus revenue estimates by 1.7%, next quarter's revenue guidance came in line, and share prices are up 10.8% on average since the latest earnings results, with Paycom up 25.3% to $218.96.
Stocks Waver as Mixed Earnings and Chipmaker Rebound Offset Software Weakness
U.S. stocks were mixed on Thursday as a rebound in chipmakers and stronger-than-expected economic data helped offset a sell-off in software shares following disappointing earnings. The S&P 500 edged up 0.07%, the Dow fell 0.38%, and the Nasdaq 100 added 0.26%. Datadog tumbled over 14% after reporting second-quarter adjusted gross margin below consensus, dragging down other software names including Salesforce, Atlassian, and Workday. AppLovin sank 19% on a revenue miss, while memory chipmakers Western Digital and SanDisk fell sharply after SanDisk forecast first-quarter revenue of $10.30 billion to $10.80 billion, below the $11.16 billion consensus. Limiting losses, ARM Holdings rose more than 5% and ASML, ON Semiconductor, and Marvel Technology gained over 2%, while Paycom Software surged 22% after raising its full-year revenue outlook to $2.20 billion to $2.21 billion, above estimates. Weekly jobless claims rose by 1,000 to 199,000, better than the 205,000 expected, and second-quarter nonfarm productivity increased 1.4%, exceeding the 0.6% forecast. A Financial Times report that Fed Chair Warsh is willing to raise rates in September if inflation firms weighed on sentiment, while crude oil rose over 1% after Yemen's Houthi rebels said they targeted a Saudi oil tanker in the Gulf of Aden.
Software and Tech Weakness Pressures Stocks Despite Positive Economic Data
U.S. stock indices are mixed as weakness in software and technology stocks offsets positive economic data and strong earnings from some companies. The S&P 500 is up 0.17%, the Dow is down 0.03%, and the Nasdaq 100 is down 0.30%. Datadog plunged 15% after reporting Q2 adjusted gross margin below consensus, while AppLovin fell 19% on a revenue miss. Memory chipmakers declined after SanDisk forecast weaker-than-expected Q1 revenue. Gains were supported by better-than-expected weekly jobless claims, Q2 nonfarm productivity, and unit labor costs, along with strong results from Motorola Solutions, IonQ, Paycom Software, Ormat, and Parker-Hannifin. A Financial Times report that Fed Chair Warsh is willing to raise rates in September if inflation firms added pressure.
Paycom jumps premarket after earnings beat; data storage stocks fall
U.S. stock index futures were little changed on Thursday as investors weighed a potential Strait of Hormuz reopening and renewed AI spending concerns. Paycom Software surged 13.1% after reporting adjusted earnings of $2.78 per share, well above the $2.38 estimate, on revenue of $531.2 million. Data storage companies declined sharply, with Western Digital slumping 14.6% and Sandisk falling 9.2%, as their results failed to meet elevated AI-driven expectations. LegalZoom plunged 23% after cutting its full-year revenue forecast, citing a slowdown in Google Search traffic. Honeywell Aerospace fell 13.1% after slashing its full-year outlook in its first report as an independent company.
Paycom reported second-quarter revenue of $531.2 million, beating analyst estimates by 3.5% and sending shares up 7.2% to $187.50. Adjusted earnings per share of $2.78 exceeded consensus by 16.8%, while adjusted EBITDA of $235 million topped forecasts by 10.1%. The company raised its full-year revenue guidance midpoint to $2.20 billion and issued EBITDA guidance of $1.01 billion, above the $959.9 million analyst estimate. Billings rose 9.4% year on year to $530 million, and the operating margin expanded to 31.7% from 23.2% a year earlier.
Paycom Software has launched Asset Management, a unified tool within its HCM platform that automates tracking, allocation, and recovery of workplaces, seating, and company assets across the employee life cycle. The tool integrates workspace mapping, property ownership, and payroll-linked cost recoupment into a single system, extending Paycom's automation focus beyond HR workflows into physical asset control and compliance. The launch broadens Paycom's automation narrative, though it does not immediately alter near-term catalysts around IWant adoption or the risk that AI-driven HR tools could become commoditized and pressure pricing. Some analysts project Paycom's revenue to reach roughly $2.6 billion by 2029, with earnings of $582.4 million, while more cautious estimates assume about 6.6 percent annual revenue growth to approximately $2.5 billion.
Health Catalyst, Commerce, and Paycom Shares Fall Amid Tech Selloff
Shares of Health Catalyst, Commerce, and Paycom declined in afternoon trading as tech stocks faced pressure from rising oil prices and an unwinding of retail leverage. Health Catalyst fell 2.2%, Commerce dropped 1.5%, and Paycom slid 2.8%. The selloff was driven by a reinstated U.S. naval blockade on Iran that pushed Brent crude above $85 a barrel, fueling expectations the Federal Reserve will hold rates in the 3.50%–3.75% range and raising the cost of capital for software firms. Paycom, which is down 3.5% year-to-date and trading 38.4% below its 52-week high, saw its move considered meaningful but not fundamentally business-altering by the market.
PAYC vs. PLTR: Which Stock Offers Better Value Now?
Paycom Software and Palantir Technologies both hold a Zacks Rank of #2, or Buy, but Paycom appears to be the superior value option based on key valuation metrics. Paycom has a forward P/E ratio of 13.00 compared to Palantir's 87.10, and a PEG ratio of 1.03 versus Palantir's 1.63. Paycom's price-to-book ratio stands at 8.19, while Palantir's is 36.15. These figures contribute to Paycom's Value grade of B and Palantir's Value grade of F.
StockStory Highlights Incyte as Cash-Producing Stock with Solid Fundamentals, Flags Paycom and Oceaneering as Stocks to Turn Down
StockStory identifies Incyte as a cash-producing company with solid fundamentals, while recommending investors turn down Paycom and Oceaneering. Incyte stands out with a trailing 12-month free cash flow margin of 27.6%, annual revenue growth of 19.3% over the past two years, and annual earnings per share growth of 19.4% over the last five years, boosted by share buybacks. Paycom falls short due to subpar billings growth of 9% over the last year, estimated sales growth of 6.6% for the next 12 months, and a failure to increase operating margin. Oceaneering underperforms with stagnating sales over the last ten years, a low gross margin of 17.4%, and a lack of free cash flow generation.
Zacks Recommends Three HCM Software Stocks for Short-Term Gains
Zacks Investment Research recommends three human capital management software stocks with strong short-term upside potential: Paycom Software, Paylocity Holding, and First Advantage. Paycom Software, carrying a Zacks Rank #1 (Strong Buy), is expected to grow earnings 15.4% this year, with a consensus price target implying a 22.1% upside from its last close of $124.48. Paylocity Holding, also a Zacks Rank #1, has a price target suggesting a 54.5% increase from $100.48, with no downside risk. First Advantage, a Zacks Rank #2 (Buy), is projected to grow earnings 18.3% this year, and its price target indicates an 8.2% rise from $16.76, also with no downside.
Three software stocks—Sprout Social, Paycom, and Dolby Laboratories—face headwinds as the software industry pulls back 13% over six months, contrasting with the S&P 500's 6.3% gain. Sprout Social saw average billings growth of 9.6% over the last year and estimated sales growth of 6.9% for the next 12 months, implying a slowdown, while persistent operating losses raise concerns. Paycom's average billings growth of 9% and estimated sales growth of 6.7% suggest decelerating demand, and its operating margin remained flat. Dolby Laboratories posted 2.1% annual sales growth over five years, below typical software companies, and its operating margin declined by 2 percentage points as costs rose faster than revenue.
Paylocity Earns Top Marks in Q1 HR Software Earnings
Paylocity reported the strongest results among HR software peers in the first quarter, with revenues of $502.3 million beating analyst estimates by 2.6% and full-year EBITDA guidance raised above expectations. The company's recurring revenue grew 11.6% year on year, and it announced the acquisition of AI-powered recruiting automation firm Grayscale. Paychex posted revenues of $1.81 billion, up 19.9% and exceeding estimates by 1.5%, while Asure Software's $42.76 million in revenue, a 22.7% increase, was overshadowed by next-quarter EBITDA guidance that significantly missed expectations. Paycom's revenues rose 7.8% to $571.8 million, meeting full-year guidance but delivering the slowest growth and weakest performance against estimates among the group. Despite the mixed results, the four HR software stocks collectively saw average share prices decline 2.4% since reporting.
Paycom, Adobe, and Sprinklr Shares Fall After Fed Signals Rate Hikes
Shares of Paycom, Adobe, and Sprinklr each fell 4.1% after the Federal Reserve held its benchmark rate at 3.5%–3.75% and released a dot plot that removed expectations of a 2026 rate cut, instead introducing the possibility of a hike. The median year-end rate estimate rose to 3.8%, and the 2-year Treasury yield climbed 11 basis points to 4.161%, reducing the present value of future cash flows for software companies that are priced on earnings years into the future. Paycom, trading at $123.80 per share, is down 18.8% year-to-date and sits 48.8% below its 52-week high of $241.73 from June 2025.
Health Catalyst and Paycom Shares Fall as Investors Rotate from Growth Stocks
Health Catalyst and Paycom shares fell in afternoon trading as investors rotated out of high-multiple growth names. Health Catalyst dropped 3.6% and Paycom declined 3.5%, pressured by a hotter-than-expected May import price report that showed a 1.9% monthly rise versus a 1.1% forecast and an annual gain of 6.7%, the largest since August 2022. The data complicated the view that the Iran peace deal had resolved inflation concerns, and investors positioned cautiously ahead of new Federal Reserve Chairman Kevin Warsh's first meeting later in the week. Additional pressure came from the Bank of America fund manager survey, where 28% of respondents cited an AI bubble as the second-largest tail risk, and from SpaceX's announcement that it is acquiring AI coding platform Cursor for $60 billion, signaling consolidation of valuable AI software assets. Health Catalyst is down 23% year-to-date and trades at $1.76 per share, 57.1% below its 52-week high of $4.09 from July 2025.
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