Paychex (NASDAQ:PAYX) Shares Gap Up on Better-Than-Expected Earnings

Paychex, Inc. (NASDAQ:PAYX) gapped up before the market opened on Wednesday following a better than expected earnings announcement. 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 traded.

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

Paychex Dividend Announcement

The company also recently declared 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 dividend yield of 2.58%. The ex-dividend date was Friday, February 7th. Paychex’s dividend payout ratio is currently 82.53%.

Wall Street Analysts Forecast Growth

Several analysts recently weighed in on the stock. Barclays lifted their price objective on shares of Paychex from $135.00 to $140.00 and gave the company an “equal weight” rating in a research report on Monday, December 23rd. UBS Group raised their target price on Paychex from $152.00 to $155.00 and gave the company a “neutral” rating in a research report on Tuesday, March 4th. Finally, Royal Bank of Canada reiterated a “sector perform” rating and set a $148.00 price target on shares of Paychex in a research report on Friday, December 20th. Two investment analysts have rated the stock with a sell rating and eleven have given a hold rating to the stock. According to data from MarketBeat.com, the company has an average rating of “Hold” and an average target price of $133.23.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in PAYX. Wealth Enhancement Advisory Services LLC lifted its stake in Paychex by 3.9% during the fourth quarter. Wealth Enhancement Advisory Services LLC now owns 89,971 shares of the business services provider’s stock valued at $12,616,000 after buying an additional 3,406 shares in the last quarter. Aegis Wealth Management LLC acquired a new stake in shares of Paychex during the fourth quarter worth approximately $370,000. Wood Tarver Financial Group LLC purchased a new position in Paychex during the fourth quarter valued at approximately $367,000. Dogwood Wealth Management LLC increased its stake in Paychex by 8.7% in the 4th quarter. Dogwood Wealth Management LLC now owns 4,303 shares of the business services provider’s stock valued at $603,000 after buying an additional 344 shares during the period. Finally, GHE LLC lifted its position in Paychex by 0.5% in the 4th quarter. GHE LLC now owns 21,365 shares of the business services provider’s stock worth $2,996,000 after buying an additional 98 shares in the last quarter. Institutional investors and hedge funds own 83.47% of the company’s stock.

Paychex Stock Up 5.3 %

The business’s 50 day simple moving average is $147.91 and its 200-day simple moving average is $142.99. The company has a debt-to-equity ratio of 0.20, a quick ratio of 1.39 and a current ratio of 1.39. The company has a market cap of $54.64 billion, a price-to-earnings ratio of 31.95, a price-to-earnings-growth ratio of 4.10 and a beta of 0.98.

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.