Paycom Software stock rating reiterated as Overweight by KeyBanc
Investing.com
Published Jul 09, 2025 10:16AM ET
Investing.com - KeyBanc has reiterated its Overweight rating on Paycom Software (NYSE:PAYC), maintaining its positive outlook on the human capital management software provider. The company, currently valued at $13.12 billion, has demonstrated robust financial health with an impressive gross profit margin of 85.89%.
The financial services firm expressed confidence that Paycom will exceed expectations in its second-quarter results, due in 27 days on August 5, while likely providing guidance in line with current projections. According to InvestingPro , 8 analysts have recently revised their earnings estimates upward for the upcoming period.
KeyBanc cited several factors supporting its optimistic stance, including improved sales enablement processes and increased year-over-year contribution from the company's Customer Relationship Representative (CRR) team, which focuses on up-selling existing clients.
The firm also noted the stabilization and improvement of Paycom's packaging strategies compared to the previous year as another positive indicator for the company's performance.
Based on these developments, KeyBanc believes Paycom's recent bookings momentum is sustainable and positions the company to accelerate its recurring revenue growth throughout the year.
In other recent news, Paycom Software has reported a modest top-line beat for the first quarter, with recurring revenue surpassing $500 million for the first time and a 10% year-over-year rise in adjusted EBITDA. This financial performance was driven by internal automation and a disciplined approach to operating expenses. Following these results, Piper Sandler raised Paycom's stock target to $246, citing outperformance in revenue and EBITDA, while TD Cowen increased its target to $250, expressing confidence in Paycom's ability to meet its fiscal year 2025 guidance. KeyBanc also raised the price target to $285, highlighting improvements in sales strategies and customer retention rates. Meanwhile, Stifel adjusted its target to $215, noting strong new bookings but maintaining a cautious outlook due to inconsistent growth indicators. TD Cowen had previously increased its target to $241, pointing to strong trends and financial performance. These developments reflect analysts' varied perspectives on Paycom's strategic initiatives and financial trajectory.
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