DCF P(above)=6.4%, FV=$70 vs current ~$150+. Stock well above DCF FV. Paychex: excellent HCM/payroll business, but at current multiples it's priced for perfection. SMB employment is the key driver — softness in hiring depresses volumes. With P(above) at 6.4%, the model says this is overvalued. Premium quality businesses at premium prices is not an edge. Lean avoid at current price.
Fair Value Distribution — percentile bands
5.7% of simulations place fair value above current price
WHAT IS PRICED IN
Revenue-Based Reverse DCF
11.2%/yr
±4.0% · revenue growth to justify current price
FCF-Based Reverse DCF
7.9%/yr
±2.9% · FCF growth to justify current price
THE GAP
Market pricing margin expansion or capex normalization
KEY VALUE DRIVERS
Spearman correlation — what moves this valuation most
Eagle will generate this view by the next trading session (~7h).
Eagle will generate this view by the next trading session (~7h).
Stock down 42% from 52w high ($161→$93). Bears: AI threatens payroll commoditization, Paycor integration messy, organic growth weak. Bulls: fPE 15.8x cheap for quality, 24% analyst upside to $115, $12...
Paychex reports strong Q2 with 17% service revenue growth (7% organic + Paycor contribution), though reported net income down 4% due to .9M acquisition costs. Adjusted metrics beat (+11% adj. NI, +21%...