KeyBanc raises Paycom stock price target to $285

On Monday, KeyBanc Capital Markets analyst Jason Celino increased the price target on Paycom Software (NYSE:PAYC) shares to $285 from the previous target of $270, while maintaining an Overweight rating on the stock. The company, currently valued at $14.16 billion, has seen its stock surge 23.5% year-to-date. Celino’s adjustment follows recent investor meetings with Paycom’s CFO Bob Foster and IR James Samford, which took place last week.

During these meetings, discussions centered around the company’s recent surge in bookings, attributed to enhanced sales strategies, better product bundling, and increased customer retention rates. The company’s impressive 85.89% gross profit margin and strong financial health, as reported by InvestingPro, support this positive momentum. These factors have led to a boost in confidence regarding Paycom’s fourth-quarter recurring growth acceleration.

KeyBanc’s analysis highlighted Paycom’s internal efficiencies, especially in sales and marketing, where the company has seen improvements in targeted advertising and customer service. These efficiencies are particularly promising as Paycom aims to continue elevating its profit margins. According to InvestingPro, which offers 14 additional exclusive insights about PAYC, eight analysts have recently revised their earnings estimates upward for the upcoming period.

Celino’s positive outlook is rooted in the company’s performance and strategic improvements, which have shown to be effective in strengthening Paycom’s market position. The raised price target to $285 reflects this optimism and the anticipation of continued growth in the company’s operational and financial metrics. Based on InvestingPro’s Fair Value analysis, the stock currently appears slightly undervalued.

In other recent news, Paycom Software reported its first-quarter earnings for 2025, surpassing Wall Street expectations with an earnings per share (EPS) of $2.80, exceeding the forecasted $2.57. The company achieved a revenue of $531 million, surpassing the anticipated $525.88 million, marking a 6% year-over-year increase. This strong financial performance was accompanied by a 7% rise in recurring revenue, supported by product innovations like Beti and GONE. Analysts from Stifel, TD Cowen, Piper Sandler, and KeyBanc have responded by raising their price targets for Paycom, citing robust financial results and promising sales momentum. Stifel increased its target to $215, TD Cowen to $241, Piper Sandler to $246, and KeyBanc to $270. Despite maintaining a Hold or Neutral rating, these analysts noted the company’s strong execution and potential for growth. Paycom’s management has also updated its 2025 revenue and EBITDA guidance, reflecting confidence in its strategic direction and continued client engagement. The company’s focus on automation and international expansion is expected to drive further growth and operational efficiencies.

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