Paychex Stock Falls 5% After Quarterly Revenue Misses Estimates
Paychex (NASDAQ:PAYX) shares dropped over 5% intra-day today after the company announced its latest quarterly earnings, falling short of the consensus revenue forecast.
The company reported second-quarter earnings of $1.08 per share, slightly better than the analyst estimate of $1.07. However, its revenue, which increased by 6% year-over-year, totaled $1.26 billion, just below the expected $1.27 billion.
Despite these figures, Paychex noted that the macroeconomic environment remains generally stable for small and mid-sized businesses. They acknowledged challenges related to the cost and accessibility of growth capital, as well as difficulties in recruiting quality talent. The company's Small Business Employment Watch indicates a moderation in both job growth and wage inflation.
Looking forward to the fiscal year ending May 31, 2024, Paychex expects its PEO and Insurance Solutions revenue to grow by 7% to 9%. Other income is projected to be in the range of $35 million to $40 million. The company also anticipates adjusted earnings per share growth of 10% to 11% for the year.
| Symbol | Price | %chg |
|---|---|---|
| 6098.T | 7697 | 0 |
| VTNY.JK | 177 | 0 |
| 2181.T | 238.9 | 0 |
| SOSS.JK | 458 | 0 |
Paychex Reports Q2 EPS Beat, Revenues In Line
Paychex (NASDAQ:PAYX) reported its Q2 results, with EPS of $0.99 coming in better than the Street estimate of $0.95. Revenue was $1.19 billion, in line with Street expectations.
For fiscal 2023, the company expects total revenue to grow approximately 8%, Management Solutions revenue to grow in the range of 7%-8%, and PEO and Insurance Solutions revenue to grow in the range of 5%-7%.
According to management, the near-term outlook is somewhat cautious due to moderating employment trends and steady wage growth. However, there is still strong demand for the company's Managed Solutions and small to medium-sized businesses are continuing to rely on the company, despite macroeconomic uncertainty.
The company is focusing on retaining clients and increasing value and penetration in HR outsourcing, HCM software, and retirement solutions. On the other hand, there has been a decrease in demand for PEO and Insurance Solutions as employers and employees are reducing the additional coverage offered or purchased for their medical plans.
Paychex Shares Down 3% Despite Q2 Beat & Raised Guidance
Paychex (NASDAQ:PAYX) shares were trading more than 3% lower Thursday afternoon despite the company’s reported Q2 results, with EPS of $1.03 coming in better than the Street estimate of $0.97. Revenue grew 11.4% year-over-year to $1.21 billion, beating the Street estimate of $1.18 billion.
Despite continued investor concern surrounding macro and the health of SMBs, the company raised its fiscal 2023 EPS guidance growth to approximately 11-12% year-over-year (vs. 9-10% prior).
Margins and revenue growth are set to decline sequentially in Q2/23 before recovering in the second half of the year.
Paychex Reported Strong Q2 Beat & Raised 2022 Outlook
Paychex, Inc. (NASDAQ:PAYX) reported its Q2 results, with EPS coming in at $0.91, beating the consensus estimate of $0.80. Quarterly revenue grew 13% year-over-year to $1.09 billion, above the consensus estimate of $1.05 billion.
The beat was helped by full employment levels, SMB formation strength, effective monetization initiatives (cross-selling insurance, back office as well as professional services) as well as a more favorable float income outcome.
The company provided its full 2022-year outlook, expecting EPS growth of 18-20% (up from prior guidance of 12-14%) and total revenue growth of 10-11% (up from prior guidance of 8%).
Paychex Price Target Raised at Wedbush Following Strong Q1 Results
Analysts at Wedbush raised their price target on Paychex, Inc. (NASDAQ:PAYX) to $125 from $105 following strong Q1 results, which drove the share price more than 4% higher on Thursday.
The company delivered strong Q1 results and better-than-expected full 2022-year guidance, reflecting normalized new SMB formation levels, tracking above pre-pandemic levels.
Quarterly revenue came in at $1.08 billion, better than the Street estimate of $1.04 billion, and EPS came in at $0.89, compared to the Street estimates of $0.80.
The company’s management highlighted strong results driven by favorable compares, an improved economic environment, and good execution. Margins benefited from pandemic related expense adjustments, including delayed hiring and increased efficiencies from technology investments.
