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Paychex, Inc. (PAYX) provides payroll, human resource, and benefits outsourcing solutions for small to medium sized businesses. Its services include payroll processing, such as 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.

It is scheduled to report its Q4 2012 results on June 27, 2012, after the market closes, and will follow up with a conference call in the morning (10:30 a.m. ET) of June 28.

Technical Overview


Key Metrics
  • Market Cap: 11.81B
  • 52-week trading range: 25.12 - 32.73
  • Trailing P/E: 21.72
  • Forward P/E: 19.99
  • Price/Sales: 5.37
  • Price/Book: 7.40
  • PEG Ratio: 2.14
  • Total Debt: 0.00
  • Annual dividend yield: 3.90%
  • Return on Equity: 35.49%
  • Return on Assets: 8.72%

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $0.37 EPS, in-line with analyst estimates.

The consensus EPS is $0.34 based on 23 analysts' estimates, up from $0.33 a year ago. Revenue estimates are $557.67M, up from $522.70M a year ago. The median target price by analysts for the stock is $31.00.

Average recommendation: Hold

Source: Marketwatch

Analyst Upgrades and Downgrades
  • On March 30, 2012, RBC Capital Mkts reiterated Sector Perform rating for the company.
  • On March 1, 2012, UBS initiated Buy rating for the company.
  • On February 29, 2012, UBS initiated Buy rating for the company.
  • On December 22, 2011, RBC Capital Mkts reiterated Sector Perform rating for the company.
Latest Developments
  • On January 9, 2012, Paychex, Inc. announced it has acquired Icon Time Systems, Inc., provides in time and attendance solutions for small businesses. Paychex initially partnered with Icon Time Systems in February 2011 for the launch of the Paychex PST 1000 time clock, an easy-to-use system that delivers progressive time and attendance technology to small businesses.
  • On December 21, 2011, Paychex, Inc. announced that the fiscal 2012, it expects total services revenue to increase 7%-9% and net income to increase 5%-7%. The Company reported revenues of $2.076 billion and net income of $514.73 million in fiscal 2011.
Competitors

Paychex, Inc. operates in Staffing & Outsourcing Services industry. The company could be compared to Automatic Data Processing, Inc. (ADP), ManpowerGroup (MAN), Robert Half International Inc. (RHI), and Towers Watson & Co. (TW). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

(click to enlarge)PAYX Chart

PAYX data by YCharts

Competitors' Latest Development
  • On May 29, 2012, Towers Watson & Co. announced the completion of its acquisition of Extend Health, Inc., which operates a private Medicare exchange in the United States.
  • On May 14, 2012, Towers Watson & Co. announced that it has signed an agreement to acquire Extend Health, Inc., which operates the private Medicare exchange in the United States.
  • On May 3, 2012, Manpower Inc. announced that its Board of Directors has approved an increase in the semi-annual dividend to $0.43 per share, from $0.40 per share. The dividend is payable on June 15, 2012 to shareholders of record on June 1, 2012.
  • On May 3, 2012, Robert Half International Inc. announced that its Board of Directors has approved a quarterly cash dividend of $.15 per share. The cash dividend will be paid on June 15, 2012, to all shareholders of record as of May 25, 2012.
  • On April 27, 2012, Manpower Inc. announced a new contract, worth at least $400 million over five years, for Recruiting Services to the Australian Defence Force (ADF). The new contract renews ManpowerGroup's Recruitment Process Outsourcing (RPO) collaboration with the ADF for the next five years - and has set a record as the industry's RPO partnership.
  • On April 25, 2012, Automatic Data Processing, Inc. announced that the Board of Directors has declared a regular quarterly dividend of $0.395 per share payable July 1, 2012 to shareholders of record on June 8, 2012.
  • On April 24, 2012, Robert Half International announced that for second quarter of 2012, it expects revenue to be in the range of $1.01-$1.06 billion and earnings per share (EPS) to be in the range of $0.32-$0.37.
  • On April 20, 2012, Manpower Inc. announced that it anticipate second quarter 2012 earnings per share will range between $0.68 to $0.76. This includes an unfavorable impact of 4 cents per share related to currency changes in the quarter.
  • On April 3, 2012, Automatic Data Processing, Inc. announced that it has completed its acquisition of the human resource solutions subsidiary of SHPS, Inc., a provider of benefits administration services.
  • On February 22, 2012, Towers Watson & Co. announced that its Board of Directors has approved the purchase of up to $150 million of the company's class A common stock. The Company may make opportunistic repurchases of common stock from time to time through open-market purchases, in privately negotiated transactions or otherwise.
  • On January 26, 2012, Automatic Data Processing, Inc. announced that it has declared a regular quarterly dividend of $0.395 per share payable April 1, 2012 to shareholders of record on March 9, 2012.
  • On January 23, 2012, Automatic Data Processing, Inc. announced that Sears Canada Inc., has selected ADP's Invoice Automation Suite to automate its accounts payable (AP) processes.
  • On January 16, 2012, Automatic Data Processing, Inc. announced that it has acquired the Indian payroll business of Randstad Holding nv, NYSE Euronext Amsterdam, from its Indian subsidiary Ma Foi Randstad.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Source: Earnings Preview: Paychex