Yahoo Finance Paychex, Inc. (NASDAQ:PAYX) Just Released Its Full-Year Earnings: Here's What Analysts Think
Shareholders might have noticed that Paychex, Inc. (NASDAQ:PAYX) filed its full-year result this time last week. The early response was not positive, with shares down 5.8% to US$118 in the past week. It was a credible result overall, with revenues of US$5.3b and statutory earnings per share of US$4.67 both in line with analyst estimates, showing that Paychex is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Paychex after the latest results.
Check out our latest analysis for Paychex
Taking into account the latest results, the current consensus from Paychex's 15 analysts is for revenues of US$5.52b in 2025. This would reflect a reasonable 4.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 6.0% to US$4.98. Before this earnings report, the analysts had been forecasting revenues of US$5.54b and earnings per share (EPS) of US$4.97 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$121. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Paychex at US$130 per share, while the most bearish prices it at US$110. This is a very narrow spread of estimates, implying either that Paychex is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Paychex's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 7.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Paychex.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$121, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Paychex analysts - going out to 2027, and you can see them free on our platform here.
You can also see our analysis of Paychex's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
