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Is a Beat in the Cards for Paychex (PAYX) in Q2 Earnings?

Zacks Equity Research
·3-min read

Paychex, Inc. PAYX is scheduled to report second-quarter fiscal 2021 results on Dec 23, before market open.

Let's check out the expectations in detail.

Q2 Expectations

The Zacks Consensus Estimate for the company’s to-be-reported quarter’s revenues stands at $952.93 million, indicating a decrease of 3.8% from the year-ago reported figure.

The consensus mark for Management Solutions revenues stands at $707 million, indicating a decline of 2.8% from the year-ago reported number. Decline in check volumes (backed by reduction in the number of clients processing payrolls and the number of employees paid) is likely to have weighed on the top line.

The consensus mark for Professional employer organization (“PEO”) and Insurance Solutions revenues stands at $232 million, indicating a decline of 4.9% from the year-ago reported number. Decline in the number of clients’ worksite employees is likely to have weighed on the top line.

The consensus estimate for interest on funds held by clients’ revenues is pegged at $14.51 million, indicating 27.1% year-over-year decline. Lower average investment balances, average interest rates and realized gains are likely to have weighed on segmental revenues.

The consensus mark for earnings is pegged at 66 cents per share, indicating decline of 5.7% from the year-ago quarter’s reported figure. Decline in operating margins is likely to have weighed on the company’s bottom line.

What Our Model Says

Our proven model predicts an earnings beat for Paychex this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Paychex has an Earnings ESP of +4.15% and a Zacks Rank #3.

Paychex, Inc. Price and EPS Surprise

Paychex, Inc. Price and EPS Surprise
Paychex, Inc. Price and EPS Surprise

Paychex, Inc. price-eps-surprise | Paychex, Inc. Quote

Other Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these too have the right combination of elements to beat on earnings in their upcoming release.

FLEETCOR Technologies FLT has an Earnings ESP of +3.74% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fidelity National Information Services FIS has an Earnings ESP of +1.97% and a Zacks Rank #3.

Equifax EFX has an Earnings ESP of +2.38% and a Zacks Rank #3.

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Paychex, Inc. (PAYX) : Free Stock Analysis Report
 
Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
 
Equifax, Inc. (EFX) : Free Stock Analysis Report
 
FleetCor Technologies, Inc. (FLT) : Free Stock Analysis Report
 
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Zacks Investment Research