Paychex (NASDAQ:PAYX) Releases FY 2027 Earnings Guidance

Paychex (NASDAQ:PAYX) updated its FY 2027 earnings guidance on Wednesday morning. The company provided earnings per share (EPS) guidance of 5.900-6.010 for the period, compared to the consensus estimate of 5.890. The company issued revenue guidance of $6.8 billion-$6.9 billion, compared to the consensus revenue estimate of $6.9 billion.

Wall Street Analysts Forecast Growth

A number of equities research analysts recently issued reports on PAYX shares. Jefferies Financial Group reduced their target price on Paychex from $110.00 to $105.00 and set a “hold” rating on the stock in a research note on Thursday, March 26th. Wells Fargo & Company dropped their price target on Paychex from $116.00 to $95.00 and set an “underweight” rating for the company in a research report on Thursday, March 26th. Guggenheim assumed coverage on Paychex in a report on Thursday, March 19th. They issued a “neutral” rating for the company. Citigroup upgraded Paychex from a “neutral” rating to a “buy” rating and upped their price objective for the company from $99.00 to $140.00 in a research report on Monday, June 15th. Finally, UBS Group decreased their price objective on Paychex from $100.00 to $98.00 and set a “neutral” rating on the stock in a research note on Thursday. One investment analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, ten have assigned a Hold rating and four have given a Sell rating to the company. Based on data from MarketBeat.com, the company has an average rating of “Hold” and an average price target of $105.67.

Paychex Price Performance

Paychex stock opened at $96.72 on Friday. Paychex has a 1 year low of $85.45 and a 1 year high of $148.76. The company has a debt-to-equity ratio of 1.22, a quick ratio of 1.26 and a current ratio of 1.26. The firm has a 50 day moving average price of $95.42 and a 200 day moving average price of $99.14. The company has a market cap of $34.65 billion, a price-to-earnings ratio of 19.78 and a beta of 0.84.

Paychex (NASDAQ:PAYX) last posted its quarterly earnings results on Wednesday, June 24th. The business services provider reported $1.32 earnings per share for the quarter, topping analysts’ consensus estimates of $1.31 by $0.01. Paychex had a net margin of 27.03% and a return on equity of 50.90%. The company had revenue of $1.61 billion for the quarter, compared to the consensus estimate of $1.60 billion. During the same quarter last year, the firm posted $1.19 earnings per share. Paychex’s revenue was up 12.5% on a year-over-year basis. Paychex has set its FY 2027 guidance at 5.900-6.010 EPS. Sell-side analysts predict that Paychex will post 5.96 earnings per share for the current year.

Paychex Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, May 29th. Investors of record on Wednesday, May 13th were issued a $1.19 dividend. The ex-dividend date was Wednesday, May 13th. This is an increase from Paychex’s previous quarterly dividend of $1.08. This represents a $4.76 dividend on an annualized basis and a yield of 4.9%. Paychex’s payout ratio is 104.85%.

Key Stories Impacting Paychex

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: Paychex beat fiscal Q4 estimates, reporting EPS of $1.32 versus $1.31 expected and revenue of $1.61 billion versus $1.60 billion expected, with revenue up 12.5% year over year. Paychex earnings report
• Positive Sentiment: Management highlighted growth drivers including Paycor synergies, stronger Management Solutions performance, and AI-related monetization efforts through WISE, which supports the longer-term growth story. Zacks earnings call takeaways
• Positive Sentiment: Several analysts framed the stock as more attractive after the pullback, noting Paychex has strong fundamentals and that fiscal 2027 looks “cleaner” after a noisy 2026. Benzinga analyst note
• Neutral Sentiment: JPMorgan raised its price target to $105 from $100 but kept an Underweight rating, signaling limited upside despite acknowledging the shares can rise from current levels. JPMorgan price target update
• Neutral Sentiment: Short-interest data showed essentially no shares sold short, so short selling does not appear to be a meaningful factor in the stock’s move.
• Negative Sentiment: Investors are reacting to fiscal 2027 guidance that points to slower growth than fiscal 2026, with revenue expected to grow 5% to 6% and EPS 7% to 9%, a deceleration after the recent double-digit expansion. Proactive Investors earnings outlook article
• Negative Sentiment: Some commentary also pointed to higher-than-expected expenses and a cautious outlook as reasons the stock slipped after earnings, even though the underlying results were strong. Seeking Alpha news

Hedge Funds Weigh In On Paychex

A number of large investors have recently modified their holdings of PAYX. State Street Corp increased its position in Paychex by 1.6% during the 4th quarter. State Street Corp now owns 13,988,393 shares of the business services provider’s stock worth $1,569,218,000 after purchasing an additional 216,045 shares in the last quarter. Charles Schwab Investment Management Inc. raised its holdings in Paychex by 2.3% in the fourth quarter. Charles Schwab Investment Management Inc. now owns 11,550,173 shares of the business services provider’s stock valued at $1,295,698,000 after buying an additional 263,152 shares during the period. Select Equity Group L.P. lifted its position in Paychex by 15.9% during the second quarter. Select Equity Group L.P. now owns 4,051,413 shares of the business services provider’s stock valued at $589,319,000 after buying an additional 557,101 shares in the last quarter. Dimensional Fund Advisors LP lifted its position in Paychex by 2.7% during the fourth quarter. Dimensional Fund Advisors LP now owns 2,882,215 shares of the business services provider’s stock valued at $323,352,000 after buying an additional 76,824 shares in the last quarter. Finally, Federated Hermes Inc. grew its stake in Paychex by 4,141.2% during the fourth quarter. Federated Hermes Inc. now owns 2,409,229 shares of the business services provider’s stock worth $270,267,000 after buying an additional 2,352,423 shares during the period. 83.47% of the stock is currently owned by hedge funds and other institutional investors.

Paychex Company Profile

Paychex, Inc, founded in 1971 by B. Thomas “Tom” Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company’s core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers’ compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.