We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Paycom Software (PAYC) Q3 Earnings Post a Surprise?
Read MoreHide Full Article
A provider of human capital management software as a service, Paycom Software, Inc. (PAYC - Free Report) is set to report third-quarter 2016 results on Nov 1. Last quarter, the company posted a positive earnings surprise of 23.1%. Let's see how things are shaping up for this announcement.
Factors to Consider
Paycom Software reported better-than-expected second-quarter 2016 results, with the top- and bottom line surpassing the Zacks Consensus Estimate. Also, year-over-year comparisons on both counts were favorable.
Revenue growth seems to be steady and was positively impacted by higher recurring revenues and higher traction in cloud-based offerings. Better-than-expected demand for advanced human capital management and payroll software solutions during the reported quarter were the other positives.
We believe that the higher adoption of Paycom Software’s Affordable Care Act (“ACA”) dashboard application that tracks employee count, employee status and health care plan affordability will act as a tailwind for the company. Also, the successful cross-selling of newer products to the existing client base might boost Paycom Software’s revenues.
Nevertheless, competition from companies like Paylocity Holding Corp. (PCTY - Free Report) , Intuit Inc. and Paychex, Inc. remains a headwind.
Our proven model does not conclusively show that Paycom Software is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for Paycom Software is 0.00%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Paycom Software has a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some companies, which are worth considering as our model shows that they have the right combination of the two elements needed to post an earnings beat:
HubSpot, Inc. (HUBS - Free Report) with Earnings ESP of +13.89% and a Zacks Rank #3
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Will Paycom Software (PAYC) Q3 Earnings Post a Surprise?
A provider of human capital management software as a service, Paycom Software, Inc. (PAYC - Free Report) is set to report third-quarter 2016 results on Nov 1. Last quarter, the company posted a positive earnings surprise of 23.1%. Let's see how things are shaping up for this announcement.
Factors to Consider
Paycom Software reported better-than-expected second-quarter 2016 results, with the top- and bottom line surpassing the Zacks Consensus Estimate. Also, year-over-year comparisons on both counts were favorable.
Revenue growth seems to be steady and was positively impacted by higher recurring revenues and higher traction in cloud-based offerings. Better-than-expected demand for advanced human capital management and payroll software solutions during the reported quarter were the other positives.
We believe that the higher adoption of Paycom Software’s Affordable Care Act (“ACA”) dashboard application that tracks employee count, employee status and health care plan affordability will act as a tailwind for the company. Also, the successful cross-selling of newer products to the existing client base might boost Paycom Software’s revenues.
Nevertheless, competition from companies like Paylocity Holding Corp. (PCTY - Free Report) , Intuit Inc. and Paychex, Inc. remains a headwind.
PAYCOM SOFTWARE Price and EPS Surprise
PAYCOM SOFTWARE Price and EPS Surprise | PAYCOM SOFTWARE Quote
Earnings Whispers
Our proven model does not conclusively show that Paycom Software is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for Paycom Software is 0.00%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Paycom Software has a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some companies, which are worth considering as our model shows that they have the right combination of the two elements needed to post an earnings beat:
Mercadolibre, Inc. (MELI - Free Report) with Earnings ESP of +8.24% and a Zacks Rank #1 You can see the complete list of today’s Zacks #1 Rank stocks here
HubSpot, Inc. (HUBS - Free Report) with Earnings ESP of +13.89% and a Zacks Rank #3
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>