Paychex (NASDAQ:PAYX) Board Announces Stock Buyback Plan

Paychex (NASDAQ:PAYX) announced that its Board of Directors has authorized a share repurchase plan on Friday, January 16th, RTT News reports. The company plans to repurchase $1.00 billion in outstanding shares. This repurchase authorization authorizes the business services provider to repurchase up to 2.5% of its shares through open market purchases. Shares repurchase plans are usually a sign that the company’s board of directors believes its stock is undervalued.

Paychex Trading Up 0.6%

NASDAQ PAYX traded up $0.67 during trading on Friday, hitting $111.18. 3,421,333 shares of the company’s stock traded hands, compared to its average volume of 2,608,379. The stock has a fifty day moving average of $112.25 and a two-hundred day moving average of $126.51. Paychex has a 12-month low of $107.80 and a 12-month high of $161.24. The firm has a market cap of $39.91 billion, a P/E ratio of 25.21 and a beta of 0.91. The company has a debt-to-equity ratio of 1.17, a current ratio of 1.27 and a quick ratio of 1.27.

Paychex (NASDAQ:PAYX) last released its quarterly earnings data on Friday, December 19th. The business services provider reported $1.26 EPS for the quarter, topping the consensus estimate of $1.23 by $0.03. The firm had revenue of $1.56 billion for the quarter, compared to the consensus estimate of $1.55 billion. Paychex had a return on equity of 46.38% and a net margin of 26.45%.The company’s quarterly revenue was up 18.3% on a year-over-year basis. During the same quarter in the previous year, the business earned $1.14 earnings per share. Paychex has set its FY 2026 guidance at 5.480-5.530 EPS. As a group, sell-side analysts expect that Paychex will post 4.99 EPS for the current year.

Paychex Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Friday, February 27th. Shareholders of record on Wednesday, January 28th will be given a $1.08 dividend. The ex-dividend date is Wednesday, January 28th. This represents a $4.32 annualized dividend and a yield of 3.9%. Paychex’s payout ratio is presently 97.96%.

Wall Street Analysts Forecast Growth

A number of equities analysts have commented on the stock. Wolfe Research cut their price target on shares of Paychex from $130.00 to $115.00 and set an “underperform” rating for the company in a research note on Wednesday, December 10th. Argus cut their target price on shares of Paychex from $150.00 to $130.00 and set a “buy” rating for the company in a research report on Friday, January 2nd. BMO Capital Markets lowered their price target on Paychex from $140.00 to $121.00 and set a “market perform” rating on the stock in a research report on Tuesday, December 9th. Wells Fargo & Company cut their price objective on Paychex from $128.00 to $116.00 and set an “underweight” rating for the company in a report on Tuesday, December 9th. Finally, Cowen reissued a “hold” rating on shares of Paychex in a report on Monday, December 1st. One equities research analyst has rated the stock with a Buy rating, fourteen have assigned a Hold rating and three have assigned a Sell rating to the company. Based on data from MarketBeat, the stock currently has an average rating of “Reduce” and an average price target of $125.67.

Paychex Company Profile

Paychex, Inc, founded in 1971 by B. Thomas “Tom” Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company’s core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers’ compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.