What Happened?
Shares of HR software provider Paycom (NYSE: PAYC) jumped 3.3% in the afternoon session after the stock gained on M&A speculation within the human resources software sector, following a report that private equity firm Thoma Bravo is in talks to acquire competitor Dayforce.
The news, reported by Bloomberg, suggests that discussions for the acquisition of competitor Dayforce (NYSE: DAY), a human resources management software provider, are advanced. Such potential consolidation in the industry often leads investors to speculate that other companies in the sector, like Paycom, could also be seen as attractive acquisition targets, driving up their valuations. The report noted that the potential deal gives Dayforce an enterprise value of more than $9 billion.
After the initial pop the shares cooled down to $225.08, up 3.7% from previous close.
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What Is The Market Telling Us
Paycom’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 25% on the news that the company reported strong third-quarter earnings, which blew past analysts' EBITDA expectations. Looking ahead, its full-year EBITDA guidance exceeded Wall Street's estimates. On the other hand, its gross margin declined, and its revenue guidance for next quarter missed Wall Street's estimates. Overall, this quarter was mixed but still had some key positives.
Paycom is up 11.8% since the beginning of the year, but at $225.08 per share, it is still trading 15.3% below its 52-week high of $265.71 from June 2025. Investors who bought $1,000 worth of Paycom’s shares 5 years ago would now be looking at an investment worth $770.00.
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