HR services firm Paychex Q1 profit beats on strong PEO, insurance growth
HR services firm Paychex Q1 profit beats on strong PEO, insurance growth
Overview
U.S. payroll and HR services firm's fiscal Q1 revenue grew 6%, meeting analyst expectations
Adjusted EPS for fiscal Q1 rose 10% and beat analyst expectations
Adjusted operating income for fiscal Q1 beat analyst expectations
Outlook
Paychex expects fiscal 2027 total revenue growth of 5% to 6%
Company raises fiscal 2027 PEO and Insurance Solutions revenue growth outlook to 7% to 8%
Paychex sees fiscal 2027 adjusted diluted EPS growth of 7% to 9%
Result Drivers
PEO AND INSURANCE SOLUTIONS - Co said 12% revenue growth in PEO and Insurance Solutions was driven by more average PEO worksite employees and increased insurance volumes
MANAGEMENT SOLUTIONS - Co said 4% Management Solutions revenue growth was driven by higher revenue per client from price realization and product penetration
AI AND TECHNOLOGY INITIATIVES - Co said continued momentum in AI and launch of WISE Hire recruiting solution enhanced productivity and client outcomes
Company press release: ID:nGNXbBXV1V
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q1 Revenue | Meet | $1.63 bln | $1.63 bln (15 Analysts) |
Q1 Adjusted EPS | Beat | $1.34 | $1.32 (16 Analysts) |
Q1 EPS |
| $1.21 |
|
Q1 Adjusted Operating Income | Beat | $684.70 mln | $663.51 mln (13 Analysts) |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 13 "hold" and 4 "sell" or "strong sell"
The average consensus recommendation for the employment services peer group is "buy."
Wall Street's median 12-month price target for Paychex, Inc. is $112.00, about 2.2% below its September 22 closing price of $114.53
The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 16 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)