Paycom Software initiated at Outperform at William Blair on bright outlook
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- William Blair on Wednesday initiated coverage of Paycom Software (NYSE:PAYC) with an Outperform rating, given its market share gains and strong sales execution.
- "PAYC can grow revenue 20% or greater over the next several years due to its strong product set and sales execution, as well as a continued HR software investment cycle," said analyst Matthew Pfau.
- "We also believe margins have room for further improvement longer term and that free cash flow conversion should improve," he added.
- Pfau believes PAYC's valuation, which has largely priced in macroeconomic headwinds, presents an attractive entry point for a business that's a good long-term compounder.
- William Blair's views are in line with bullish sell-side ratings, but SA Quant rates PAYC Hold.
