What Happened?
Shares of HR software provider Paycom (NYSE: PAYC) fell 13.3% in the morning session after the company reported third-quarter earnings that disappointed investors, despite meeting revenue expectations. The human resource and payroll technology provider posted adjusted earnings of $1.94 per share, falling short of the consensus estimate of $1.96. While revenue of $493.3 million was slightly ahead of expectations and grew 9.2% from the previous year, the results highlighted slowing momentum. The company reaffirmed its full-year revenue guidance, but this was not enough to satisfy investors, who seemed to be hoping for a stronger outlook. Furthermore, billings growth of 9.5% mirrored the slowdown in sales, suggesting increasing competition is creating challenges.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Paycom? Access our full analysis report here.
What Is The Market Telling Us
Paycom’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Paycom and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 3.5% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Paycom is down 19.8% since the beginning of the year, and at $161.47 per share, it is trading 39.2% 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 $416.03.
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