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Is a Beat in Store for Paycom (PAYC) This Earnings Season?
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Paycom Software (PAYC - Free Report) is scheduled to report second-quarter 2024 results after market close on Jul 31.
PAYC projects revenues between $434 million and $438 million for the second quarter. The Zacks Consensus Estimate for revenues is pegged at $436.2 million, indicating an increase of 8.7% year over year. The consensus mark for earnings is pegged at $1.58 per share, suggesting a 2.5% decline from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $151-$155 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 6.4%.
Let’s see how things have shaped up for the upcoming announcement.
Although PAYC has been suffering from macroeconomic challenges and business disruptions caused by uncertainties developed by global conflicts, the enhancement of its offerings through AI implementation is likely to have gained new clients, driving the company’s revenues.
Moreover, Paycom’s second-quarter performance is likely to have benefited from the strong demand for its latest products, the addition of new customers and high-margin recurring revenues. Our estimate for the company’s recurring revenues is pegged at $428.5 million, suggesting year-over-year growth of 8.6%.
PAYC’s employee usage strategy, efforts on sales and investments might have contributed to sales growth in the second quarter of 2024. Furthermore, the company earlier announced its plans to strengthen its advertising and marketing efforts to generate more demo leads and virtual meetings, and ensure growth in sales close rates. These factors are likely to have contributed to the market share gains for Paycom.
Paycom expects the strong adoption of its Beti solution. Notably, Beti enables employees to manage all their payroll requirements, including timecards, benefits, expenses and vacation requests. The solution helps employees rectify forms before submission. This solution reduces hassles and saves time for its users. New client additions to Beti’s present user base are likely to have driven the top line in the second quarter.
Earnings Whispers
Our proven model predicts an earnings beat for PAYC this earnings 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, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.65 per share) and the Zacks Consensus Estimate ($1.58 per share), is +3.83%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Paycom carries a Zacks Rank #3 at present.
Other Stocks With Favorable Combination
Here are some other companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Arista Networks’ shares have gained 33.4% year to date. ANET is set to report its second-quarter 2024 results on Jul 30.
The Zacks Consensus Estimate for ANET’s second-quarter 2024 earnings has been revised upward by a penny to $1.94 per share over the past seven days and indicates an improvement of 22.8% from the year-ago quarter’s earnings of $1.58. The consensus mark for revenues is pegged at $1.64 billion, indicating a 12.4% increase from the year-ago quarter.
Apple (AAPL - Free Report) has an Earnings ESP of +3.05% and carries a Zacks Rank #2 at present. Shares of AAPL have gained 13% year to date. The company is set to report third-quarter fiscal 2024 results on Aug 1.
The Zacks Consensus Estimate for AAPL’s third-quarter 2024 earnings has been revised upward by a penny to $1.33 over the past 60 days and indicates an improvement of 5.6% from the year-ago quarter. The consensus mark for revenues is pegged at $83.8 billion, indicating a 2.4% increase from the year-ago quarter.
GoDaddy (GDDY - Free Report) has an Earnings ESP of +13.08% and a Zacks Rank #3 at present. GoDaddy’s shares have gained 35% year to date. GDDY is set to report second-quarter 2024 results on Aug 1.
The Zacks Consensus Estimate for GDDY’s second-quarter 2024 earnings has remained unchanged at $1.07 over the past 60 days, indicating an improvement of 69.8% from the year-ago quarter. The consensus mark for revenues is pegged at $1.11 billion, indicating a 6.3% increase from the year-ago quarter.
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Is a Beat in Store for Paycom (PAYC) This Earnings Season?
Paycom Software (PAYC - Free Report) is scheduled to report second-quarter 2024 results after market close on Jul 31.
PAYC projects revenues between $434 million and $438 million for the second quarter. The Zacks Consensus Estimate for revenues is pegged at $436.2 million, indicating an increase of 8.7% year over year. The consensus mark for earnings is pegged at $1.58 per share, suggesting a 2.5% decline from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $151-$155 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 6.4%.
Let’s see how things have shaped up for the upcoming announcement.
Paycom Software, Inc. Price and EPS Surprise
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
Factors to Note
Although PAYC has been suffering from macroeconomic challenges and business disruptions caused by uncertainties developed by global conflicts, the enhancement of its offerings through AI implementation is likely to have gained new clients, driving the company’s revenues.
Moreover, Paycom’s second-quarter performance is likely to have benefited from the strong demand for its latest products, the addition of new customers and high-margin recurring revenues. Our estimate for the company’s recurring revenues is pegged at $428.5 million, suggesting year-over-year growth of 8.6%.
PAYC’s employee usage strategy, efforts on sales and investments might have contributed to sales growth in the second quarter of 2024. Furthermore, the company earlier announced its plans to strengthen its advertising and marketing efforts to generate more demo leads and virtual meetings, and ensure growth in sales close rates. These factors are likely to have contributed to the market share gains for Paycom.
Paycom expects the strong adoption of its Beti solution. Notably, Beti enables employees to manage all their payroll requirements, including timecards, benefits, expenses and vacation requests. The solution helps employees rectify forms before submission. This solution reduces hassles and saves time for its users. New client additions to Beti’s present user base are likely to have driven the top line in the second quarter.
Earnings Whispers
Our proven model predicts an earnings beat for PAYC this earnings 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, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.65 per share) and the Zacks Consensus Estimate ($1.58 per share), is +3.83%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Paycom carries a Zacks Rank #3 at present.
Other Stocks With Favorable Combination
Here are some other companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Arista Networks (ANET - Free Report) has an Earnings ESP of +1.72% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have gained 33.4% year to date. ANET is set to report its second-quarter 2024 results on Jul 30.
The Zacks Consensus Estimate for ANET’s second-quarter 2024 earnings has been revised upward by a penny to $1.94 per share over the past seven days and indicates an improvement of 22.8% from the year-ago quarter’s earnings of $1.58. The consensus mark for revenues is pegged at $1.64 billion, indicating a 12.4% increase from the year-ago quarter.
Apple (AAPL - Free Report) has an Earnings ESP of +3.05% and carries a Zacks Rank #2 at present. Shares of AAPL have gained 13% year to date. The company is set to report third-quarter fiscal 2024 results on Aug 1.
The Zacks Consensus Estimate for AAPL’s third-quarter 2024 earnings has been revised upward by a penny to $1.33 over the past 60 days and indicates an improvement of 5.6% from the year-ago quarter. The consensus mark for revenues is pegged at $83.8 billion, indicating a 2.4% increase from the year-ago quarter.
GoDaddy (GDDY - Free Report) has an Earnings ESP of +13.08% and a Zacks Rank #3 at present. GoDaddy’s shares have gained 35% year to date. GDDY is set to report second-quarter 2024 results on Aug 1.
The Zacks Consensus Estimate for GDDY’s second-quarter 2024 earnings has remained unchanged at $1.07 over the past 60 days, indicating an improvement of 69.8% from the year-ago quarter. The consensus mark for revenues is pegged at $1.11 billion, indicating a 6.3% increase from the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.