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Investing.com - KeyBanc Capital Markets raised its price target on Paycom Software (NYSE:PAYC) to $290 from $285 while maintaining an Overweight rating following the company’s second-quarter earnings report. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s prospects.
The human resources software provider delivered what KeyBanc described as a "strong 2Q beat" on both top and bottom lines, while also raising its full-year guidance by more than the amount of the quarterly outperformance. The company maintains impressive gross profit margins of 86% and has achieved 10.2% year-over-year revenue growth.
KeyBanc noted that much of the earnings call discussion centered around "IWant," Paycom’s new command-driven AI assistant, which the firm believes could drive better full-suite adoption and attract new customers.
The investment bank acknowledged that IWant might spark investor debates given the level of investment required without direct monetization plans, but considered the release "significant" for Paycom’s growth prospects.
The price target increase reflects KeyBanc’s "continued conviction in the Company’s execution ability and growth drivers," according to the research note.
In other recent news, Paycom Software reported its second-quarter 2025 earnings, surpassing market expectations. The company achieved an earnings per share of $2.06, exceeding the forecasted $1.78, which resulted in a 15.73% surprise. Revenue also outperformed projections, reaching $484 million compared to the expected $472.01 million. Following these results, BMO Capital raised its price target for Paycom Software from $244 to $258 while maintaining a Market Perform rating. The adjustment in the price target reflects BMO’s positive outlook based on Paycom’s current performance and its raised guidance for future quarters. Despite the favorable earnings report, Paycom’s stock did not see a change in after-hours trading, indicating a cautious market sentiment. These developments provide investors with insights into Paycom’s financial health and market position.
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