Paychex (NASDAQ:PAYX) Reaches New 1-Year Low – Should You Sell?

Shares of Paychex, Inc. (NASDAQ:PAYX) reached a new 52-week low on Friday . The stock traded as low as $91.24 and last traded at $91.8520, with a volume of 176472 shares traded. The stock had previously closed at $92.34.

Wall Street Analysts Forecast Growth

A number of equities research analysts have recently commented on the company. Cantor Fitzgerald upgraded Paychex to a “strong sell” rating in a research note on Tuesday, January 27th. Citigroup lowered their price objective on shares of Paychex from $139.00 to $120.00 and set a “neutral” rating on the stock in a research report on Monday, December 22nd. Royal Bank Of Canada dropped their target price on shares of Paychex from $150.00 to $125.00 and set a “sector perform” rating on the stock in a research note on Friday, December 5th. TD Cowen reissued a “hold” rating on shares of Paychex in a research report on Monday, December 1st. Finally, Wells Fargo & Company lowered their price target on shares of Paychex from $128.00 to $116.00 and set an “underweight” rating on the stock in a report on Tuesday, December 9th. One analyst has rated the stock with a Buy rating, thirteen have given a Hold rating and four have issued a Sell rating to the company’s stock. According to MarketBeat, the company has a consensus rating of “Reduce” and a consensus target price of $123.94.

Paychex Trading Down 1.4%

The company has a market cap of $32.69 billion, a P/E ratio of 20.66 and a beta of 0.90. The company has a quick ratio of 1.27, a current ratio of 1.27 and a debt-to-equity ratio of 1.17. The firm’s 50-day moving average price is $106.86 and its 200-day moving average price is $119.08.

Paychex (NASDAQ:PAYX) last released its quarterly earnings data on Friday, December 19th. The business services provider reported $1.26 earnings per share for the quarter, beating analysts’ consensus estimates of $1.23 by $0.03. The business had revenue of $1.56 billion during the quarter, compared to analyst estimates of $1.55 billion. Paychex had a net margin of 26.45% and a return on equity of 46.38%. Paychex’s revenue was up 18.3% compared to the same quarter last year. During the same period in the previous year, the business earned $1.14 EPS. Paychex has set its FY 2026 guidance at 5.480-5.530 EPS. As a group, equities research analysts expect that Paychex, Inc. will post 4.99 earnings per share for the current fiscal year.

Paychex Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, February 27th. Investors of record on Wednesday, January 28th will be issued a dividend of $1.08 per share. The ex-dividend date of this dividend is Wednesday, January 28th. This represents a $4.32 dividend on an annualized basis and a yield of 4.7%. Paychex’s dividend payout ratio is 97.96%.

Paychex announced that its Board of Directors has initiated a share repurchase program on Friday, January 16th that authorizes the company to buyback $1.00 billion in outstanding shares. This buyback authorization authorizes the business services provider to buy up to 2.5% of its shares through open market purchases. Shares buyback programs are often a sign that the company’s board believes its stock is undervalued.

Institutional Investors Weigh In On Paychex

Several hedge funds and other institutional investors have recently modified their holdings of PAYX. ABC Arbitrage SA boosted its holdings in shares of Paychex by 61.4% during the 3rd quarter. ABC Arbitrage SA now owns 28,208 shares of the business services provider’s stock valued at $3,576,000 after purchasing an additional 10,726 shares during the last quarter. Summit Global Investments lifted its position in shares of Paychex by 1,938.2% in the third quarter. Summit Global Investments now owns 48,143 shares of the business services provider’s stock worth $6,103,000 after buying an additional 45,781 shares in the last quarter. Alps Advisors Inc. grew its holdings in Paychex by 20.6% during the 3rd quarter. Alps Advisors Inc. now owns 240,564 shares of the business services provider’s stock valued at $30,494,000 after buying an additional 41,114 shares in the last quarter. GSA Capital Partners LLP purchased a new position in Paychex during the 3rd quarter valued at approximately $1,877,000. Finally, Invesco Ltd. increased its stake in Paychex by 6.0% in the 2nd quarter. Invesco Ltd. now owns 4,384,846 shares of the business services provider’s stock worth $637,820,000 after acquiring an additional 249,550 shares during the last quarter. 83.47% of the stock is currently owned by institutional investors.

About Paychex

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.