A month has gone by since the last earnings report for Paycom Software, Inc. (PAYC Quick QuotePAYC - Free Report) . Shares have added about 3.4% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Paycom Software Q1 Earnings & Revenues Beat Estimates

Paycom Software reported better-than-expected first-quarter 2017 results.  

The company’s adjusted income per share (including stock-based compensation) came in at $0.44 per share, which beat the Zacks Consensus Estimate of $0.37. Also, reported earnings increased from $0.31 in the year-ago quarter.

Quarter Details

Paycom Software’s revenues came in at $119.5 million, increasing 32.6% from the year-ago quarter. Revenues also beat the Zacks Consensus Estimate of $116 million. The year-over-over increase was driven by the addition of new clients and product development initiatives coupled with better-than-expected performance from Paycom's single database architecture.

Moreover, revenues were impacted positively by a 32.6% increase in recurring revenues and 30.4% increase in implementation and other revenues on a year-over-year basis.

The company’s adjusted gross margin (including stock-based compensation) declined 107 basis points (bps) on a year-over-year basis to 85.6%, primarily due to higher cost of sale.

Paycom Software’s adjusted operating margin (including stock-based compensation) increased from 31.8% reported in the year-ago quarter to 32.3%, primarily due to lower operating expenses as a percentage of revenues and higher revenue base. As a percentage of revenues, expenses decreased to 53.3% during the quarter from 54.9% reported in the year-ago period.

Adjusted net income (including stock-based compensation) came in at $25.6 million compared with $18.6 million reported in the year-ago quarter.

Balance Sheet & Cash Flow

Paycom Software exited the first quarter with cash and cash equivalents of $92.9 million compared with $60.2 million in the previous quarter. Receivables were $1.8 million compared with $1.5 million in the previous quarter.

Paycom Software’s balance sheet comprises long-term debt of $30.4 million compared with $28.7 million reported in the last quarter. The company reported cash flow from operations of $40.2 million during the quarter.

During the quarter, the company extended the share repurchase program by an additional $50 million amount.

Guidance

In second-quarter fiscal 2017, Paycom Software expects revenues in the range of $94.5–$96.5 million. Adjusted EBITDA is expected to be approximately in the range of $22–$24 million.

Paycom Software updated it fiscal 2017 guidance. The company now expects revenues in the range of $426–$428 million (previously $422–$424 million). Adjusted EBITDA is expected to be approximately in a range of $117–$119 million (previously $113– $115 million).

How have estimates been moving since then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, the stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for growth based on our styles scores.

Outlook

The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.