Paychex (NASDAQ:PAYX) Shares Gap Up After Earnings Beat

Paychex, Inc. (NASDAQ:PAYX) gapped up before the market opened on Wednesday following a stronger than expected earnings report. The stock had previously closed at $144.13, but opened at $148.81. Paychex shares last traded at $151.53, with a volume of 805,658 shares changing hands.

The business services provider reported $1.49 EPS for the quarter, topping the consensus estimate of $1.48 by $0.01. The company had revenue of $1.51 billion during the quarter, compared to analyst estimates of $1.51 billion. Paychex had a net margin of 32.02% and a return on equity of 45.28%. The firm’s revenue was up 4.8% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $1.38 EPS.

Paychex Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Thursday, February 27th. Investors of record on Friday, February 7th were given a dividend of $0.98 per share. This represents a $3.92 annualized dividend and a yield of 2.61%. The ex-dividend date of this dividend was Friday, February 7th. Paychex’s payout ratio is currently 82.53%.

Wall Street Analysts Forecast Growth

A number of research firms have recently issued reports on PAYX. Barclays boosted their price target on shares of Paychex from $135.00 to $140.00 and gave the company an “equal weight” rating in a research note on Monday, December 23rd. UBS Group lifted their price objective on Paychex from $152.00 to $155.00 and gave the company a “neutral” rating in a research note on Tuesday, March 4th. Finally, Royal Bank of Canada reissued a “sector perform” rating and issued a $148.00 target price on shares of Paychex in a report on Friday, December 20th. Two equities research analysts have rated the stock with a sell rating and ten have given a hold rating to the company’s stock. According to MarketBeat, the company presently has an average rating of “Hold” and an average price target of $134.50.

Institutional Trading of Paychex

Several institutional investors have recently added to or reduced their stakes in the stock. Royal London Asset Management Ltd. lifted its holdings in shares of Paychex by 2.3% in the 3rd quarter. Royal London Asset Management Ltd. now owns 187,663 shares of the business services provider’s stock worth $25,182,000 after purchasing an additional 4,157 shares during the last quarter. Miracle Mile Advisors LLC increased its holdings in shares of Paychex by 91.1% during the fourth quarter. Miracle Mile Advisors LLC now owns 10,808 shares of the business services provider’s stock valued at $1,515,000 after purchasing an additional 5,153 shares during the period. MML Investors Services LLC increased its stake in Paychex by 6.5% during the 3rd quarter. MML Investors Services LLC now owns 329,080 shares of the business services provider’s stock valued at $44,159,000 after buying an additional 20,064 shares during the period. Franklin Resources Inc. raised its holdings in Paychex by 2.8% during the third quarter. Franklin Resources Inc. now owns 997,930 shares of the business services provider’s stock worth $142,055,000 after purchasing an additional 27,296 shares in the last quarter. Finally, Jones Financial Companies Lllp raised its stake in shares of Paychex by 120.0% in the 4th quarter. Jones Financial Companies Lllp now owns 6,936 shares of the business services provider’s stock worth $973,000 after buying an additional 3,783 shares in the last quarter. 83.47% of the stock is owned by institutional investors and hedge funds.

Paychex Trading Up 4.2 %

The stock has a market capitalization of $54.08 billion, a P/E ratio of 31.62, a PEG ratio of 4.10 and a beta of 0.98. The firm’s 50-day simple moving average is $148.03 and its 200 day simple moving average is $143.04. The company has a quick ratio of 1.39, a current ratio of 1.39 and a debt-to-equity ratio of 0.20.

About Paychex

Paychex, Inc, together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing.