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Paycom (PAYC) to Report Q2 Earnings: What's in the Offing?

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Paycom Software (PAYC - Free Report) is slated to release second-quarter 2020 results on Aug 4.

Citing economic and business uncertainties of its clients due to the COVID-19 pandemic, the company hadn’t issued any guidance for the second quarter.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $180.9 million, indicating a rise of 6.8%, year on year. The consensus mark for earnings is pegged at 61 cents per share, suggesting an 18.7% year-over-year decline.

Let’s see how things have shaped up for the upcoming announcement.

Key Factors

Paycom’s quarterly performance is likely to have been hurt by the unexpected rate cuts and spike in unemployment level due to the economic and business disruptions caused by the pandemic. Notably, some of the company’s businesses are directly related to the number of headcounts at its client offices.

Nonetheless, Paycom’s expanding foothold among larger companies makes us optimistic about its upcoming quarterly results. The differentiated product offering of Direct Data Exchange for all Paycom clients is expected to have aided customer additions. Moreover, the launch of Ask Here is anticipated to have been conducive to its performance during the period in discussion.

Moreover, Paycom’s performance in the June-end quarter is likely to have benefited from new business wins and its high-margin recurring revenue business. A solid demand for its solutions across the market is likely to have been a key growth driver as well.

The company’s employee usage strategy, sales efforts and investments are likely to have boosted sales growth.

What Our Model Says

Our proven model does not predict an earnings beat for Paycom this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Paycom currently carries a Zacks Rank of 4 and has an Earnings ESP of -11.23%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

TakeTwo Interactive Software (TTWO - Free Report) has an Earnings ESP of +5.35% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMETEK Inc. (AME - Free Report) has an Earnings ESP of +3.96% and carries a Zacks Rank of 2, currently.

KLA Corporation (KLAC - Free Report) has an Earnings ESP of +0.67% and currently carries a Zacks Rank of 2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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