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What's in the Offing for Paycom (PAYC) This Earnings Season?
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Paycom Software (PAYC - Free Report) is scheduled to report third-quarter 2022 results on Nov 1.
The company projects revenues between $327 million and $329 million for the third quarter. The Zacks Consensus Estimate for revenues is pegged at $328.1 million, indicating an increase of 28.1% year over year. The consensus mark for earnings stands at $1.18 per share, suggesting a 28.3% rise from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $117 million-$119 million in the quarter to be reported. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.1%.
Paycom’s third-quarter performance is likely to have benefited from the strong demand for the latest products, new business wins and the high-margin recurring revenue business. The company’s employee usage strategy, sales efforts and investments might have contributed to sales growth in the quarter to be reported.
The cloud-based human capital management solution provider had earlier announced its intention to aggressively drive advertising and marketing efforts to generate more demo leads, virtual meetings and increased close rates of deals. This is likely to have led to further market share gains for Paycom.
The cloud-based human capital management solution provider continues to expect the strong adoption of the BETI solution, the industry-first technology that empowers employees to do their payroll among clients, aiding them in avoiding time-consuming manual checks. We anticipate new client additions to have driven the top line in the third quarter.
However, Paycom’s quarterly performance is expected to have been hurt by macroeconomic uncertainty-triggered economic and business disruptions, which might have hurt the headcount across its client base. Enterprises are postponing their large IT spending plans due to the weakening global economy amid ongoing macroeconomic and geopolitical issues.
What Our Model Unveils
Our proven model does not conclusively predict an earnings beat for PAYC 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. However, that’s not the case here.
Though Paycom currently carries a Zacks Rank of #3, it has an Earnings ESP of -0.85%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Fortinet (FTNT - Free Report) , Baidu (BIDU - Free Report) and CDW Corporation (CDW - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Fortinet is slated to report third-quarter 2022 results on Nov 2. The company carries a Zacks Rank #2 and has an Earnings ESP of +0.92% at present. Fortinet’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for quarterly earnings is pegged at 27 cents per share, suggesting a year-over-year improvement of 35%. FTNT’s quarterly revenues are estimated to increase 29.6% year over year to $1.12 billion.
Baidu currently carries a Zacks Rank #2 and has an Earnings ESP of +0.82%. The company is expected to report its third-quarter 2022 results on Nov 16. Baidu’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 58.1%.
The Zacks Consensus Estimate for Baidu’s third-quarter earnings stands at $2.44 per share, indicating a year-over-year improvement of 7%. BIDU is estimated to report revenues of $4.74 billion, which suggests a decline of 4.3% from the year-ago quarter.
CDW carries a Zacks Rank #3 and has an Earnings ESP of +0.31%. The company is scheduled to report third-quarter 2022 results on Nov 2. CDW’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.8%.
The Zacks Consensus Estimate for CDW’s third-quarter earnings is pegged at $2.52 per share, indicating a year-over-year increase of 18.3%. The consensus mark for revenues stands at $6.21 billion, suggesting a year-over-year increase of 17.2%.
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What's in the Offing for Paycom (PAYC) This Earnings Season?
Paycom Software (PAYC - Free Report) is scheduled to report third-quarter 2022 results on Nov 1.
The company projects revenues between $327 million and $329 million for the third quarter. The Zacks Consensus Estimate for revenues is pegged at $328.1 million, indicating an increase of 28.1% year over year. The consensus mark for earnings stands at $1.18 per share, suggesting a 28.3% rise from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $117 million-$119 million in the quarter to be reported. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.1%.
Paycom Software, Inc. Price and EPS Surprise
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
Factors to Note Ahead of Q3 Earnings
Paycom’s third-quarter performance is likely to have benefited from the strong demand for the latest products, new business wins and the high-margin recurring revenue business. The company’s employee usage strategy, sales efforts and investments might have contributed to sales growth in the quarter to be reported.
The cloud-based human capital management solution provider had earlier announced its intention to aggressively drive advertising and marketing efforts to generate more demo leads, virtual meetings and increased close rates of deals. This is likely to have led to further market share gains for Paycom.
The cloud-based human capital management solution provider continues to expect the strong adoption of the BETI solution, the industry-first technology that empowers employees to do their payroll among clients, aiding them in avoiding time-consuming manual checks. We anticipate new client additions to have driven the top line in the third quarter.
However, Paycom’s quarterly performance is expected to have been hurt by macroeconomic uncertainty-triggered economic and business disruptions, which might have hurt the headcount across its client base. Enterprises are postponing their large IT spending plans due to the weakening global economy amid ongoing macroeconomic and geopolitical issues.
What Our Model Unveils
Our proven model does not conclusively predict an earnings beat for PAYC 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. However, that’s not the case here.
Though Paycom currently carries a Zacks Rank of #3, it has an Earnings ESP of -0.85%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Fortinet (FTNT - Free Report) , Baidu (BIDU - Free Report) and CDW Corporation (CDW - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Fortinet is slated to report third-quarter 2022 results on Nov 2. The company carries a Zacks Rank #2 and has an Earnings ESP of +0.92% at present. Fortinet’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for quarterly earnings is pegged at 27 cents per share, suggesting a year-over-year improvement of 35%. FTNT’s quarterly revenues are estimated to increase 29.6% year over year to $1.12 billion.
Baidu currently carries a Zacks Rank #2 and has an Earnings ESP of +0.82%. The company is expected to report its third-quarter 2022 results on Nov 16. Baidu’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 58.1%.
The Zacks Consensus Estimate for Baidu’s third-quarter earnings stands at $2.44 per share, indicating a year-over-year improvement of 7%. BIDU is estimated to report revenues of $4.74 billion, which suggests a decline of 4.3% from the year-ago quarter.
CDW carries a Zacks Rank #3 and has an Earnings ESP of +0.31%. The company is scheduled to report third-quarter 2022 results on Nov 2. CDW’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.8%.
The Zacks Consensus Estimate for CDW’s third-quarter earnings is pegged at $2.52 per share, indicating a year-over-year increase of 18.3%. The consensus mark for revenues stands at $6.21 billion, suggesting a year-over-year increase of 17.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.