Paychex (NASDAQ:PAYX) Shares Gap Down on Disappointing Earnings

Shares of Paychex, Inc. (NASDAQ:PAYXGet Free Report) gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $152.25, but opened at $145.27. Paychex shares last traded at $138.65, with a volume of 945,157 shares changing hands.

The business services provider reported $1.19 earnings per share (EPS) for the quarter, meeting the consensus estimate of $1.19. The firm had revenue of $1.43 billion for the quarter, compared to analysts’ expectations of $1.38 billion. Paychex had a net margin of 29.75% and a return on equity of 45.01%. During the same period in the prior year, the company posted $1.12 earnings per share.

Paychex Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, May 29th. Shareholders of record on Monday, May 12th were issued a dividend of $1.08 per share. This represents a $4.32 dividend on an annualized basis and a yield of 3.06%. The ex-dividend date of this dividend was Monday, May 12th. This is an increase from Paychex’s previous quarterly dividend of $0.98. Paychex’s dividend payout ratio (DPR) is currently 90.00%.

Analysts Set New Price Targets

PAYX has been the subject of several research reports. Royal Bank Of Canada set a $165.00 price target on shares of Paychex and gave the company a “sector perform” rating in a report on Tuesday. Stifel Nicolaus decreased their target price on Paychex from $156.00 to $152.00 and set a “hold” rating for the company in a research note on Thursday. Cfra Research raised Paychex to a “hold” rating in a report on Thursday, March 27th. Barclays set a $155.00 price target on Paychex and gave the stock an “equal weight” rating in a research report on Tuesday. Finally, JPMorgan Chase & Co. boosted their price objective on Paychex from $140.00 to $148.00 and gave the company an “underweight” rating in a research report on Wednesday, June 18th. Two equities research analysts have rated the stock with a sell rating and ten have given a hold rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of “Hold” and an average target price of $143.00.

Read Our Latest Analysis on Paychex

Insider Activity at Paychex

In other news, Director Joseph M. Velli sold 3,650 shares of the stock in a transaction on Tuesday, April 15th. The stock was sold at an average price of $149.25, for a total value of $544,762.50. Following the completion of the transaction, the director now owns 78,455 shares of the company’s stock, valued at approximately $11,709,408.75. This represents a 4.45% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through this link. 11.40% of the stock is owned by insiders.

Hedge Funds Weigh In On Paychex

Several large investors have recently bought and sold shares of the stock. Brighton Jones LLC raised its holdings in Paychex by 26.3% during the fourth quarter. Brighton Jones LLC now owns 5,710 shares of the business services provider’s stock worth $801,000 after purchasing an additional 1,190 shares in the last quarter. IFP Advisors Inc increased its position in shares of Paychex by 12.6% during the 4th quarter. IFP Advisors Inc now owns 6,365 shares of the business services provider’s stock valued at $898,000 after purchasing an additional 712 shares during the period. Lake Street Advisors Group LLC raised its stake in shares of Paychex by 6.9% in the 4th quarter. Lake Street Advisors Group LLC now owns 2,943 shares of the business services provider’s stock worth $413,000 after buying an additional 190 shares in the last quarter. Bryn Mawr Capital Management LLC bought a new stake in shares of Paychex in the 4th quarter worth $357,000. Finally, Whipplewood Advisors LLC acquired a new stake in shares of Paychex in the fourth quarter valued at $41,000. Institutional investors and hedge funds own 83.47% of the company’s stock.

Paychex Price Performance

The company has a 50 day moving average of $151.75 and a two-hundred day moving average of $147.75. The firm has a market cap of $50.79 billion, a P/E ratio of 30.86, a PEG ratio of 2.87 and a beta of 0.92. The company has a quick ratio of 1.39, a current ratio of 1.28 and a debt-to-equity ratio of 1.10.

Paychex Company Profile

(Get Free Report)

Paychex, Inc, together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing.

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