Paychex (NASDAQ:PAYX) Shares Gap Up on Strong Earnings

Paychex, Inc. (NASDAQ:PAYX) shares gapped up prior to trading on Wednesday following a stronger than expected earnings report. 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.

The business services provider reported $1.49 earnings per share for the quarter, beating analysts’ consensus estimates of $1.48 by $0.01. The company had revenue of $1.51 billion for the quarter, compared to analysts’ expectations of $1.51 billion. Paychex had a return on equity of 45.28% and a net margin of 32.02%. Paychex’s quarterly revenue was up 4.8% on a year-over-year basis. During the same period last year, the firm earned $1.38 earnings per share.

Paychex Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Thursday, February 27th. Investors of record on Friday, February 7th were given a $0.98 dividend. The ex-dividend date of this dividend was Friday, February 7th. This represents a $3.92 annualized dividend and a yield of 2.58%. Paychex’s dividend payout ratio (DPR) is 82.53%.

Wall Street Analysts Forecast Growth

PAYX has been the topic of a number of research reports. Barclays raised their price target on Paychex from $135.00 to $140.00 and gave the stock an “equal weight” rating in a report on Monday, December 23rd. UBS Group increased their price target on shares of Paychex from $152.00 to $155.00 and gave the stock a “neutral” rating in a report on Tuesday, March 4th. Finally, Royal Bank of Canada restated a “sector perform” rating and issued a $148.00 price objective on shares of Paychex in a research report on Friday, December 20th. Two analysts have rated the stock with a sell rating and eleven have issued a hold rating to the company’s stock. According to data from MarketBeat.com, Paychex presently has a consensus rating of “Hold” and an average target price of $133.23.

Institutional Investors Weigh In On Paychex

A number of large investors have recently bought and sold shares of PAYX. Quest Partners LLC acquired a new stake in Paychex during the third quarter worth approximately $36,000. Larson Financial Group LLC increased its stake in shares of Paychex by 23.6% during the 3rd quarter. Larson Financial Group LLC now owns 613 shares of the business services provider’s stock valued at $82,000 after acquiring an additional 117 shares during the last quarter. Summit Trail Advisors LLC boosted its position in shares of Paychex by 52.1% in the third quarter. Summit Trail Advisors LLC now owns 8,505 shares of the business services provider’s stock worth $1,141,000 after acquiring an additional 2,914 shares during the last quarter. DRW Securities LLC purchased a new position in Paychex during the third quarter worth approximately $508,000. Finally, Brown Brothers Harriman & Co. boosted its holdings in Paychex by 0.9% in the third quarter. Brown Brothers Harriman & Co. now owns 9,881 shares of the business services provider’s stock valued at $1,326,000 after acquiring an additional 86 shares during the last quarter. Institutional investors and hedge funds own 83.47% of the company’s stock.

Paychex Stock Up 5.3 %

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. The firm’s 50-day moving average price is $147.91 and its 200-day moving average price is $142.99. The company has a debt-to-equity ratio of 0.20, a current ratio of 1.39 and a quick ratio of 1.39.

Paychex Company Profile

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.