Equity Brief · Technology2026-09-16
PAYC·Technology

Paycom Software, Inc.

I · AI Analysis

The brief

Paycom sells subscription software that manages the full employee lifecycle—recruiting, payroll processing, tax filing, time tracking, performance reviews, and benefits enrollment—delivered entirely through the cloud [Yahoo Finance]. The company serves small to mid-sized businesses across the United States, replacing manual HR processes with a single integrated platform [Yahoo Finance].

Paycom Software provides cloud-based human resources management software as a subscription service for small and mid-sized U.S. companies, handling payroll, hiring, time tracking, and benefits administration [Yahoo Finance]. The company reported trailing-twelve-month revenue of $2.1B through 30 June 2026, up 9.8% in the latest quarter from a year earlier, with a net margin of 22.8% [Yahoo Finance]. Recent news highlighted Paycom as a top performer in HR software following its Q2 earnings, though analyst consensus remains 'hold' [Yahoo Finance] [Americanbankingnews].

Paycom is financially healthy with strong margins, solid cash generation, and a forward price-to-earnings ratio that implies the market expects earnings growth [Sentinellis calculation] [Yahoo Finance].

The brief AI analysisConfidence 8/10

Sentinellis health

Financially healthy

8.6/10

7+ strong · 4–7 moderate · under 4 weak

Profitability

14% of score10.0/10
Net margin+22.8%Gross margin+88.1%

Returns on capital

14% of score10.0/10
ROIC+35.0%Return on equity+85.3%

Growth & momentum

19% of score10.0/10
Revenue growth+9.8%Operating margin trend+8.5pp YoY

Balance sheet

29% of score5.0/10
Current ratio1.1x· need > 1.2xNet debt / EBITDA0.9xInterest coverage190.7xDebt / equity1.72· need < 1.5

Cash generation

14% of score10.0/10
Free cash flow$570.6MCash vs reported profit$801.5M vs $487.6M

Value creation

10% of score10.0/10
ROIC vs cost of capital+26.9pp

Sentinellis calculation from the published statements — not a score reported by any data source. Each category is scored on the checks that had data; missing inputs are excluded rather than counted as failures.

Market capitalisation

$10.2B

Revenue (TTM)

$2.1B

II · Recent news

What moved

3 stories · ranked by relevance

  • company2026-09-14

    HR Software Q2 Earnings: Paycom (NYSE:PAYC) is the Best in the Biz - Yahoo Finance

    Yahoo Finance

  • company2026-09-15

    Paycom Software, Inc. (NYSE:PAYC) Receives Average Rating of “Hold” from Brokerages

    Americanbankingnews

  • company2026-09-14

    California State Teachers Retirement System Raises Stake in Paycom Software, Inc. $PAYC

    Americanbankingnews

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Growth has slowed to single digits: revenue rose 9.8% in the latest quarter, down from the faster pace the company posted in prior years [Yahoo Finance].

1 of 4 risks in this report

Risks

4

Opportunities

5

Leadership

8

8 more findings in the full report — free with any account.

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Produced 16 Sept 2026, 09:04 UTC

Figures come from company filings and market data. The Sentinellis health score and the wording attached to it are our interpretation of those figures, not numbers the company reported.

Not investment advice and not a recommendation to buy or sell. Sentinellis holds no positions in the companies it covers, takes no payment from issuers, and has no broker referral arrangements.

How every figure and score is calculated