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Last week saw the newest annual earnings release from Paycom Software, Inc. (NYSE:PAYC), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of US$1.7b and statutory earnings per share of US$5.88. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Paycom Software
Taking into account the latest results, the current consensus from Paycom Software's 21 analysts is for revenues of US$1.87b in 2024. This would reflect a decent 11% increase on its revenue over the past 12 months. Statutory earnings per share are expected to reduce 6.8% to US$5.62 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.87b and earnings per share (EPS) of US$5.62 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$203, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Paycom Software analyst has a price target of US$260 per share, while the most pessimistic values it at US$160. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Paycom Software's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.4% annually. So it's pretty clear that, while Paycom Software's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.