Paychex slightly beats Q4 revenue estimates on strength in HR services
Paychex slightly beats Q4 revenue estimates on strength in HR services
Overview
U.S. HR and payroll provider's fiscal Q4 revenue rose 12%, slightly beating analyst expectations
Adjusted EPS for fiscal Q4 rose 11% and beat analyst expectations
Company returned $2.2 bln to shareholders in fiscal 2026 via dividends and buybacks
Outlook
Paychex expects fiscal 2027 total revenue to grow 5% to 6%
Company anticipates fiscal 2027 adjusted diluted EPS growth of 7% to 9%
Paychex sees fiscal 2027 adjusted operating margin at approximately 44%
Result Drivers
PAYCOR ACQUISITION - Full-quarter contribution from Paycor drove Management Solutions revenue growth
HR SOLUTIONS AND PRICING - Higher product penetration, growth in client worksite employees, and price realization supported Management Solutions revenue
PEO AND INSURANCE GROWTH - Increased average PEO worksite employees and higher PEO insurance revenues boosted segment revenue
Company press release: ID:nGNX2pmDFx
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q4 Revenue | Slight Beat* | $1.61 bln | $1.60 bln (15 Analysts) |
Q4 Adjusted EPS | Beat | $1.32 | $1.30 (16 Analysts) |
Q4 EPS |
| $1.17 |
|
Q4 Adjusted Net Income | Beat | $474.60 mln | $468.14 mln (13 Analysts) |
Q4 Adjusted Operating Income | Beat | $675.80 mln | $657.09 mln (13 Analysts) |
Q4 Adjusted Operating Margin |
| 42.10% |
|
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
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 $102.00, about 4.1% above its June 23 closing price of $97.99
The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 16 three months ago
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(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.)