Paychex, Inc (PAYX) Fair Value & Analysis

Technology · US · Market cap $38.9B

A solid business, but screening 18% overvalued on our models.

What matters now

• A high-quality business (quality 71/100), yet the market already pays well above fair value. Quality at a full price, with little margin of safety.
• A fairly wide model range ($66.70 to $125.20) leaves room in how you read the outcome.

Price vs Fair Value (5 years)

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Jul 15, 2026.

How to read this chart

60‑month range $82.86 – $153.47 · fair‑value band $66.70 – $125.20 · the $120.13 price screens above the $98.21 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Jul 15, 2026.

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Analysis

Paychex, Inc (PAYX) currently trades at $120.13, while our model-based Fair Value estimate is $98.21, implying the stock looks roughly 18.3% overvalued today. We read business quality at 71/100 (solid quality), in the Technology sector. Bear case: priced above our estimate, the market already discounts strong expectations. Bull case: above-average quality can justify a premium, the entry price still matters most (evidence: high).

Over the trailing twelve months, Paychex, Inc generated revenue of $4.0B at a net margin of 26.6%. Revenue grew 19.9% year over year. It earns a return on equity of 40.3%. Net debt stands at $3.5B. Fundamentals as of Jul 15, 2026

Our scenario range runs from $66.70 (bear case) to $125.20 (bull case); at $120.13, the current price sits within that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 22% below its 52-week high and 42% above its 52-week low, currently above its 200-day average. For context, the median of 10 Technology peers we cover trades at -27% fair-value upside, at -18%, PAYX screens cheaper than that median.

Fair Value models

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.

Widest divergence: DCF Models ($107.68) versus Asset-Based ($7.04). Highest evidence: Growth DCF (80).

Key figures & financial health

Quality Score breakdown

About the company

Paychex, Inc., together with its subsidiaries, provides human capital management solutions (HCM) for payroll, employee benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India.

Full company description

Paychex, Inc., together with its subsidiaries, provides human capital management solutions (HCM) for payroll, employee 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. The company provides retirement solutions, such as plan implementation, ongoing compliance with government regulations, employee and employer reporting, participant and employer online access, electronic funds transfer, and other administrative services; HCM solutions from recruiting and hiring to retirement; and talent management and talent acquisition services. In addition, it offers payroll solutions, including calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients' payroll obligations. Further, the company provides workforce management solutions; benefits administration solutions; digital marketplace for earned wages, financial wellness solutions, and voluntary lifestyle benefits; HR support to non-payroll clients through HR Partner Plus solution; and insurance services for property and casualty coverage, such as workers' compensation, business-owner policies, cyber security protection, and commercial auto, as well as health and benefits coverage, including health, dental, vision, and life. Additionally, it offers payroll, employer compliance, HR and employee benefits administration, risk management outsourcing, and both virtual and on-site availability of a professionally trained HR representative, and other solutions to businesses. It markets and sells its services primarily through its direct sales force. The company was founded in 1971 and is headquartered in Rochester, New York.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2022 – FY2026 · reported fiscal years

Paychex, Inc reported revenue of $6.5B in FY2026 versus $4.6B in FY2022, a compound +9.0%/yr. Reported net income was $1.8B in FY2026, compounding +6.0%/yr from FY2022.

PAYX screens 18% overvalued. Compare with SAP SE →

Peer Group

Software - Application · 709 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Valuation Multiples vs Software - Application median · lower = cheaper

Snowflake

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

Insider activity: 45/100

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.

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Frequently asked questions

How we calculate Fair Value

Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.