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Paychex Inc

PAYX SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT Market cap $41.2B Share price × shares outstanding.
$115.70 ▼ -1.98%
−$2.34 on the day · as of 27 Oct 2026
72
S.I.F.T.™ score
Adequate
Rules-based score out of 100 across Safety, Income, Fundamentals and Time. Strong 80+, Adequate 60–79, Caution under 60. A band describes the score, not an action.
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S.I.F.T.™ pillars One or more pillars are only adequate.

Safety65
Decent financial position but faces notable competition.
Income65
Revenue is growing but remains cyclical.
Fundamentals85
Strong growth but valuation is elevated.
Time75
Shorter track record or weaker tailwinds.
Last updated: 27 Oct 2026 · Model score (rules-based screen of the data shown; not advice or a forecast): 70%
Reality check (rules-based) S.I.F.T. band: Adequate

Strong (80+) · Adequate (60–79) · Caution (<60). A band describes the score, not an action.

PAYX fundamentals pillar scores 85 with a 10-year ROE average of 47.11. Net debt to CFO stands at 1.52 and cash to market cap at 0.

Strengths: Fundamentals pillar score of 85, 10-year ROE average of 47.11, Dividend yield of 3.00%
Risks: Safety pillar score of 65, Income stability pillar score of 65, Net debt to CFO ratio of 1.52, Cash to market cap ratio of 0

For education and general information only. Not a recommendation to buy, sell, or hold. How the score is calculated

Price History

At its core

High returns on capital, low debt, steady operating margins and priced above its Graham number. Revenue has grown about 8.2% a year over 10 years; a cash dividend has been paid 24 years in a row.

Rule-based description of the figures below (FY2016–FY2026). Not a recommendation.
As of FY2026, period end 2026-05-31. Balance sheet: SEC EDGAR companyfacts (10-K, period end 2026-05-31).

Business quality returns, margins, cash

Returns on capital, margins and cash generation, with how steady each has been.

ROE Return on equity: net income ÷ shareholders' equity at year end. Shows how much profit the business earns on the owners' capital. Very high values can come from a small equity base after buybacks. Moderate
47.1%
5-yr avg 44.3%
FY2016FY2026
ROIC Return on invested capital: operating income after tax ÷ (equity + debt − cash). Shows how well the business turns the capital tied up in it into profit. Variable
26.7%
5-yr avg 40.9%
FY2016FY2026
Gross margin Gross profit ÷ revenue. A high, steady gross margin can point to pricing power. Steady
74.3%
5-yr avg 72.0%
Operating margin Operating income ÷ revenue: what is left from each dollar of sales after running the business, before interest and tax. Steady
38.6%
5-yr avg 40.0%
FY2016FY2026
Free cash flow Operating cash flow − capital expenditure. The cash the business produced after keeping up and growing its assets.
$2.3B
FY2016FY2026
FCF margin Free cash flow ÷ revenue. Steady
35.7%
5-yr avg 32.0%
Owner earnings Owner earnings, simplified (1986 definition): net income + depreciation & amortisation − capital expenditure. Working-capital changes are left out.
$2.0B
Capital intensity Capital expenditure ÷ revenue. Lower means the business needs less reinvestment in plant and equipment to run and grow. Steady
3.6%
5-yr avg 3.2%

Balance sheet strength Cash and Debt Ledger

Net debt / EBITDA (Borrowings − cash and short-term investments) ÷ (operating income + D&A). Roughly how many years of operating earnings would repay net debt. Negative means more cash than debt.
1.2×
Debt / equity Reported borrowings ÷ shareholders' equity.
1.2×
Interest cover Operating income ÷ interest expense: how many times profit covers the interest bill. Graham looked for a wide cover.
9.3×
Current ratio Current assets ÷ current liabilities. Graham's rule of thumb for industrials was 2 or more.
1.3×
Cash & short-term investments Cash, cash equivalents and short-term investments on the latest annual balance sheet (the Cash side of the S.I.F.T. Cash and Debt Ledger).
$1.1B
Borrowings Short- and long-term debt and commercial paper on the latest annual balance sheet (the Debt side of the Cash and Debt Ledger). Leases and other liabilities are excluded.
$4.6B

Graham value price vs fundamentals

P/E Price ÷ earnings per share (trailing four quarters where available, otherwise the last fiscal year). Not shown when earnings are negative.
23.0×
P/B Price ÷ book value per share (equity ÷ shares outstanding).
11.0×
Graham number Benjamin Graham's ceiling for a defensive investor: √(22.5 × EPS × book value per share), i.e. P/E 15 × P/B 1.5. Undefined when EPS or book value is negative.
$34.45
Graham margin of safety (Graham number − price) ÷ Graham number. Positive: price is below the Graham number. Negative: price is above it.
-235.8%
Earnings yield EPS ÷ price, the inverse of P/E. Graham compared it with the yield on high-grade bonds.
4.3%
vs 10-yr Treasury 4.96%
10-yr Treasury yield US 10-year Treasury yield on 2026-10-22, for comparison with the earnings yield.
5.0%
Dividend yield Cash dividends per share with ex-dates in the last 12 months ÷ price.
3.9%
Payout ratio Dividends paid ÷ net income for the last fiscal year.
90.3%
Dividend record Consecutive calendar years with a cash dividend in the dividend file (file starts 2003). Graham asked for an unbroken record.
24 yrs

Track record 11 fiscal years on file

Revenue CAGR Compound annual growth in revenue from the first to the last fiscal year shown.
8.2%
FY2016–FY2026
FY2016FY2026
EPS CAGR Compound annual growth in diluted EPS (net income ÷ diluted shares). Not defined when the start or end year is a loss.
8.9%
FY2016–FY2026
FY2016FY2026
FCF CAGR Compound annual growth in free cash flow. Not defined when the start or end year is negative.
9.7%
FY2016–FY2026
FY2016FY2026
Share count change Change in diluted weighted share count. Negative = fewer shares (buybacks); positive = dilution.
-0.7%
FY2016–FY2026 · buybacks
FY2016FY2026

Source: SEC filings as reported (XBRL) and market data. Figures are not restated for acquisitions or one-off items; share counts are adjusted for detected splits. “—” means the figure is not in the data file, never a zero. For education and general information only. Not a recommendation to buy, sell, or hold. How the score is calculated

The business

Paychex is a cloud-based human capital management provider offering payroll, compliance, talent management, benefits administration, and retirement services. The firm also provides HR outsourcing services, including professional employer organization, or PEO, offerings, enabling clients to reduce HR overhead. Paychex primarily targets small and midsize businesses, although its acquisition of Paycor in 2025 signals the firm's aspirations to expand into the midmarket segment, serving firms with more than 100 employees. As of fiscal 2026, Paychex has approximately 840,000 clients and manages payroll for one in 11 workers in the United States.

FAQ

Recent quarters three-month figures

QuarterPeriod endRevenueGross profitOperating incomeNet incomeEPS (diluted)
Q1 FY2027 2026-08-31 $1.6B$1.2B$619.2M$429.7M$1.20
Q4 FY2026 2026-05-31 $1.6B$1.2B$604.7M$420.6M$1.17
Q3 FY2026 2026-02-28 $1.8B$1.4B$792.0M$560.3M$1.55
Q2 FY2026 2025-11-30 $1.6B$1.1B$571.9M$395.4M$1.09
Q1 FY2026 2025-08-31 $1.5B$1.1B$541.9M$383.8M$1.06
Q4 FY2025 2025-05-31 $1.4B$1.0B$431.1M$297.2M$0.82
Q3 FY2025 2025-02-28 $1.5B$1.1B$691.8M$519.3M$1.43
Q2 FY2025 2024-11-30 $1.3B$937.8M$538.1M$413.4M$1.14

Quarter figures are derived from year-to-date filings (Q4 = full year − nine months). EPS = net income ÷ diluted shares for the period. — = not in data file.

Annual figures fiscal years, newest first

YearRevenueGross profitOperating incomeNet incomeEPS (diluted)Free cash flowEquityBorrowings
FY2026 $6.5B$4.8B$2.5B$1.8B$4.89$2.3B$3.7B$4.6B
FY2025 $5.6B$4.0B$2.2B$1.7B$4.58$1.7B$4.1B$5.0B
FY2024 $5.3B$3.8B$2.2B$1.7B$4.67$1.7B$3.8B$817.3M
FY2023 $5.0B$3.6B$2.0B$1.6B$4.30$1.6B$3.5B$808.4M
FY2022 $4.6B$3.3B$1.8B$1.4B$3.84$1.4B$3.1B$806.4M
FY2021 $4.1B$2.8B$1.5B$1.1B$3.03$1.1B$2.9B$804.7M
FY2020 $4.0B$2.8B$1.5B$1.1B$3.04$1.3B$2.8B$801.9M
FY2019 $3.8B—$1.4B$1.0B$2.86$1.1B$2.6B$796.4M
FY2018 $3.4B—$1.3B$933.7M$2.58$1.1B$2.0B—
FY2017 $3.2B—$1.2B$817.3M$2.25$866.1M$2.0B—
FY2016 $3.0B—$1.1B$756.8M$2.09$920.5M$1.9B—

As reported in each year's 10-K. Free cash flow = operating cash flow − capital expenditure. — = not in data file.