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PAYC · Analysis updated Nov 10, 2026, 6:00 PM ET
Why is Paycom Software, Inc. (PAYC) stock moving?
Paycom beat expectations on its Q3 2026 report on Nov 4: revenue of $543.8M rose 10.2%, adjusted EPS was $3.37 against a $2.81 estimate, adjusted EBITDA was $268.1M (49% of revenue), and FY2026 revenue guidance was raised to $2.213B-$2.218B, above the $2.209B consensus. Recurring revenue was 95.5% of the total and grew 11.3%. The stock nonetheless sold off after the report. It closed at $268.16 on Nov 4 on heavy volume, opened at $247 on Nov 5, fell to a low of $233.01 and closed at $250.02 on 1.73M shares, the highest volume in the period. It then closed at $237.32, $236.46 and $237.96 on Nov 6, 9 and 10, a decline of about 11% from the Nov 4 close. Volume has eased from the Nov 5 peak to about 1.07M on Nov 10, and the price has held in a narrow $236-$238 band. The news items do not state why the shares fell. The sell-off coincides with BTIG's downgrade to Neutral on Nov 5 and with Citigroup keeping a Neutral rating and cutting its target to $264. Deutsche Bank kept a Hold rating and raised its target to $275, while KeyBanc kept an Overweight rating with a $297 target and Cantor Fitzgerald kept a Neutral rating with a $285 target. The listed targets sit 11% to 25% above the Nov 10 close. Other factors are the FY2026 growth outlook of about 8%, a cash balance of $193.9M against $370.0M at Dec 31, 2025, and a quarterly dividend of $0.375 (record Nov 23, paid Dec 7).
News behind the analysis
- Citigroup Maintains Neutral on Paycom Software, Lowers Price Target to $264Citigroup kept its Neutral rating on Paycom and cut its price target to $264. The shares closed at $237.96 on Nov 10.
- BTIG Downgrades Paycom Software to NeutralBTIG downgraded Paycom to Neutral on Nov 5, the day after the Q3 report, when the shares fell to a low of $233.01.
- Deutsche Bank Adjusts Paycom Software Price Target to $275 From $205Deutsche Bank raised its price target from $205 to $275 while keeping a Hold rating.
- Keybanc Maintains Overweight on Paycom Software, Raises Price Target to $297KeyBanc reaffirmed its Overweight rating and raised its price target to $297, the highest target among the recent analyst updates.
- Paycom Software Reports Q3 2026 Financial Results and Updates Revenue OutlookPaycom reported Q3 2026 revenue of $543.8M, up 10.2%, and adjusted EPS of $3.37, ahead of analyst expectations. Full-year revenue guidance was raised.
- Paycom Software Q3 Adj. EPS $3.37 Beats $2.81 Estimate, Sales $543.800M Beat $535.285M EstimateQ3 adjusted EPS of $3.37 beat the $2.81 estimate, and sales of $543.8M beat the $535.3M estimate.
- Paycom Software Raises FY2026 Sales Guidance from $2.197B-$2.212B to $2.213B-$2.218B vs $2.209B EstPaycom raised its FY2026 revenue guidance to $2.213B-$2.218B, above the $2.209B consensus, implying growth of about 8%.
- Paycom Software Q3 2026 Earnings Call TranscriptThe transcript of Paycom's Q3 2026 earnings call, held Wednesday, Nov 4, is available for review.
- Paycom Software, Inc. Declares Quarterly Cash DividendPaycom's Board declared a quarterly cash dividend of $0.375 per share, payable Dec 7 to holders of record on Nov 23.
- Cantor Fitzgerald Maintains Neutral on Paycom Software, Raises Price Target to $285Cantor Fitzgerald kept its Neutral rating and raised its price target to $285 on Oct 30, before the Q3 report.
About PAYCOM SOFTWARE, INC.
Paycom Software, based in Oklahoma City, sells cloud-based payroll and HR software that companies use to manage their employees, from hiring to payday. Its distinguishing feature is a single platform built on one database, with heavy automation where employees enter and check their own payroll data (Beti) and AI tools like IWant and GONE. It also returns a lot of cash to shareholders through large share buybacks and a quarterly dividend.
How it makes money
About 95% of revenue is recurring: monthly fees charged per employee, per pay run, for payroll, HR, time tracking, talent management and benefits software. The remaining roughly 5% is interest earned on client payroll money it holds briefly before paying it out, and that amount moves with interest rates. Total revenue runs at roughly $2.2 billion a year (company guidance for 2026).
What usually moves PAYC
- Revenue growth and client retention rates
- Employment levels and hiring at mid-sized US businesses
- Interest rates, which affect income on client funds
- Competition and pricing pressure in payroll/HR software
- Margins, share buybacks and capital returns