Paychex Inc.
Find Ratings ReportsPAYCHEX INC's gross profit margin for the second quarter of its fiscal year 2023 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its subsector this quarter as compared to the same quarter a year ago. PAYCHEX INC has very weak liquidity. Currently, the Quick Ratio is 0.43 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.
During the same period, stockholders' equity ("net worth") has increased by 9.95% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. To learn more visit www.TheStreetRatings.com.
Income Statement | Q2 FY23 | Q2 FY22 |
---|---|---|
Net Sales ($mil) | 1257.9 | 1190.3 |
EBITDA ($mil) | 551.1 | 516.6 |
EBIT ($mil) | 506.2 | 472.3 |
Net Income ($mil) | 392.7 | 360.3 |
Balance Sheet | Q2 FY23 | Q2 FY22 |
---|---|---|
Cash & Equiv. ($mil) | 1445.4 | 1319.9 |
Total Assets ($mil) | 12052.1 | 9214.3 |
Total Debt ($mil) | 865.5 | 874.8 |
Equity ($mil) | 3524.4 | 3205.3 |
Profitability | Q2 FY23 | Q2 FY22 |
---|---|---|
Gross Profit Margin | 74.62 | 73.54 |
EBITDA Margin | 43.81 | 43.4 |
Operating Margin | 40.24 | 39.68 |
Sales Turnover | 0.43 | 0.52 |
Return on Assets | 13.52 | 15.91 |
Return on Equity | 46.24 | 45.76 |
Debt | Q2 FY23 | Q2 FY22 |
---|---|---|
Current Ratio | 1.23 | 1.3 |
Debt/Capital | 0.2 | 0.21 |
Interest Expense | 8.5 | 9.2 |
Interest Coverage | 59.55 | 51.34 |
Share Data | Q2 FY23 | Q2 FY22 |
---|---|---|
Shares outstanding (mil) | 359.8 | 360.47 |
Div / share | 0.89 | 0.79 |
EPS | 1.08 | 0.99 |
Book value / share | 9.8 | 8.89 |
Institutional Own % | n/a | n/a |
Avg Daily Volume | 1769940.0 | 1851278.0 |
BUY. The current P/E ratio indicates a significant discount compared to an average of 40.26 for the Professional, Scientific, and Technical Services subsector and a value on par with the S&P 500 average of 27.95. For additional comparison, its price-to-book ratio of 12.41 indicates a significant premium versus the S&P 500 average of 4.68 and a discount versus the subsector average of 13.30. The price-to-sales ratio is well above both the S&P 500 average and the subsector average, indicating a premium. Upon assessment of these and other key valuation criteria, PAYCHEX INC proves to trade at a discount to investment alternatives.
Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
PAYX 27.02 | Peers 40.26 | PAYX 21.70 | Peers 33.12 | |||||||||||||||||||||
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. PAYX is trading at a significant discount to its peers. |
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. PAYX is trading at a significant discount to its peers. |
|||||||||||||||||||||||
Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
PAYX 24.27 | Peers 25.54 | PAYX 2.77 | Peers 6.56 | |||||||||||||||||||||
Average. An average price-to-projected earnings ratio can signify an subsector neutral stock price and average future growth expectations. PAYX is trading at a valuation on par with its peers. |
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. PAYX trades at a significant discount to its peers. |
|||||||||||||||||||||||
Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
PAYX 12.41 | Peers 13.30 | PAYX 11.11 | Peers 3.25 | |||||||||||||||||||||
Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. PAYX is trading at a valuation on par with its peers. |
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. PAYX is expected to have an earnings growth rate that significantly exceeds its peers. |
|||||||||||||||||||||||
Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
PAYX 8.49 | Peers 4.53 | PAYX 7.01 | Peers 6.63 | |||||||||||||||||||||
Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. PAYX is trading at a significant premium to its subsector. |
Average. Comparing a company's sales growth to its subsector helps to determine if the company is adding or losing market share. PAYX is keeping pace with its peers on the basis of sales growth. |
|||||||||||||||||||||||