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Factors to Note Ahead of Paycom's (PAYC) Q1 Earnings Release
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Paycom Software (PAYC - Free Report) is scheduled to report first-quarter 2023 results on May 2.
The company projects revenues between $443 million and $445 million for the first quarter. The Zacks Consensus Estimate for revenues is pegged at $444.2 million, indicating an increase of 25.7% year over year. The consensus mark for earnings is pegged at $2.34 per share, suggesting a 23.2% rise from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $210-$212 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 11.6%.
Paycom’s first-quarter performance is likely to have benefited from strong demand for 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 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 market share gains for Paycom.
The company expects strong adoption of BETI solution, an industry-first technology that empowers employees to do their payroll among clients, aiding them to avoid time-consuming manual checks. We anticipate new client additions to have driven the top line in the first quarter.
However, Paycom’s quarterly performance is expected to have been affected 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 Says
Our proven model does not conclusively predict an earnings beat for Paycom this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
PAYC has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. 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, Cactus (WHD - Free Report) , Garmin (GRMN - Free Report) and PayPal (PYPL - Free Report) have the right combination of elements to post an earnings beat in upcoming releases.
Cactus has an Earnings ESP of +1.79% and sports a Zacks Rank #1 at present. The company is set to report its first-quarter 2023 results on May 9. WHD’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WHD’s first-quarter earnings is pegged at 56 cents per share, indicating an 86.7% surge from the year-ago quarter’s 30 cents. The consensus mark for revenues is pegged at $213.8 million, suggesting a year-over-year increase of 46.5%.
Currently, Garmin has an Earnings ESP of +5.79% and carries a Zacks Rank #3 at present. The company is scheduled to report its first-quarter 2023 results on May 3, before market open. GRMN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missing once, delivering an average earnings surprise of 7.3%.
The Zacks Consensus Estimate for GRMN’s first-quarter earnings is $1 per share, indicating a year-over-year decline of 9.9%. The company is estimated to report revenues of $1.08 billion, which suggests a decline of 7.9% from the year-ago quarter.
PayPal has an Earnings ESP of +2.15% and carries a Zacks Rank #3 at present. The company is set to report first-quarter 2023 results on May 8. PYPL’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, matching once, the average surprise being 6.6%.
The Zacks Consensus Estimate for PayPal’s quarterly earnings is pegged at $1.09 per share, suggesting a year-over-year increase of 23.9%. Its quarterly revenues are estimated to increase 7.6% year over year to $6.98 billion.
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Factors to Note Ahead of Paycom's (PAYC) Q1 Earnings Release
Paycom Software (PAYC - Free Report) is scheduled to report first-quarter 2023 results on May 2.
The company projects revenues between $443 million and $445 million for the first quarter. The Zacks Consensus Estimate for revenues is pegged at $444.2 million, indicating an increase of 25.7% year over year. The consensus mark for earnings is pegged at $2.34 per share, suggesting a 23.2% rise from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $210-$212 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 11.6%.
Paycom Software, Inc. Price and EPS Surprise
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
Key Factors at Play
Paycom’s first-quarter performance is likely to have benefited from strong demand for 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 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 market share gains for Paycom.
The company expects strong adoption of BETI solution, an industry-first technology that empowers employees to do their payroll among clients, aiding them to avoid time-consuming manual checks. We anticipate new client additions to have driven the top line in the first quarter.
However, Paycom’s quarterly performance is expected to have been affected 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 Says
Our proven model does not conclusively predict an earnings beat for Paycom this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
PAYC has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. 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, Cactus (WHD - Free Report) , Garmin (GRMN - Free Report) and PayPal (PYPL - Free Report) have the right combination of elements to post an earnings beat in upcoming releases.
Cactus has an Earnings ESP of +1.79% and sports a Zacks Rank #1 at present. The company is set to report its first-quarter 2023 results on May 9. WHD’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WHD’s first-quarter earnings is pegged at 56 cents per share, indicating an 86.7% surge from the year-ago quarter’s 30 cents. The consensus mark for revenues is pegged at $213.8 million, suggesting a year-over-year increase of 46.5%.
Currently, Garmin has an Earnings ESP of +5.79% and carries a Zacks Rank #3 at present. The company is scheduled to report its first-quarter 2023 results on May 3, before market open. GRMN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missing once, delivering an average earnings surprise of 7.3%.
The Zacks Consensus Estimate for GRMN’s first-quarter earnings is $1 per share, indicating a year-over-year decline of 9.9%. The company is estimated to report revenues of $1.08 billion, which suggests a decline of 7.9% from the year-ago quarter.
PayPal has an Earnings ESP of +2.15% and carries a Zacks Rank #3 at present. The company is set to report first-quarter 2023 results on May 8. PYPL’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, matching once, the average surprise being 6.6%.
The Zacks Consensus Estimate for PayPal’s quarterly earnings is pegged at $1.09 per share, suggesting a year-over-year increase of 23.9%. Its quarterly revenues are estimated to increase 7.6% year over year to $6.98 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.