Key Stats for Paycom Stock
- Past-Week Performance: -8.9%
- 52-Week Range: $104.9 to $267.8
- Current Price: $124.2
What Happened?
Full-solution automation finally showed up in Paycom‘s retention line: the Oklahoma City payroll and human capital management software provider lifted its annual revenue retention rate to 91% in 2025, even as its stock trades at $124 near a 52-week low of $104.90, down from a high of $267.76.
Paycom’s February 11 Q4 earnings report delivered $544.3 million in revenue, up 10.2% YoY and ahead of the $543.0 million consensus, while adjusted EPS of $2.45 edged past the $2.44 estimate, but 2026 revenue guidance of $2.175–$2.195 billion fell short of the $2.23 billion LSEG consensus, sending shares down 9.2% premarket on February 12.
IWant, Paycom’s command-driven AI engine that lets any employee navigate the platform without training, reported 80% usage growth in January alone versus Q4 2025, and a Forrester study found composite organizations deploying it generated over 400% ROI, a differentiation metric no named competitor including ADP, Paylocity, or Workday has matched publicly.
On February 19, Paycom promoted Shane Hadlock to President and Chief Client Officer, and Chad Richison stated on the Q4 2025 earnings call that “Forrester’s recent analysis of a composite organization with more than 500 employees found that organizations using IWant experienced an ROI of over 400%, driven by productivity gains at every level,” grounding the leadership change in a concrete product mandate.
https://finance.yahoo.com/news/paycom-expanded-us-1-46b-141002164.html, expanded March 12 via a $461.6 million supplement with JPMorgan Chase, its $200 million buyback authorization approved March 5, and a 2026 adjusted EBITDA target of $950–$970 million at a ~44% margin position the company to press its automation advantage across the 95% of the addressable market it has not yet reached.
Wall Street’s Take on PAC Stock
The 91% retention rate achieved in 2025 confirms that IWant’s productivity gains, validated by Forrester at 400%+ ROI, are translating into client stickiness, and the TIKR model projects that momentum sustaining revenue through a 6.8% mid-case CAGR to December 2030.
The TIKR estimates forecasts normalized EPS growing from $9.24 in 2025 to $10.34 in 2026 and $11.42 in 2027, a trajectory anchored by the company’s own adjusted EBITDA guidance of $950–$970 million for 2026, implying a ~44% margin on $2.175–$2.195 billion in projected revenue.
Seven analysts rate PAYC a buy or outperform against 15 holds and zero sells, with a mean price target of $152.94 implying 23.2% upside from $124.15, a spread that reflects genuine uncertainty about whether IWant-driven retention gains can offset the below-consensus 2026 revenue guide.
The gap between the $120.00 analyst floor and the $240.00 ceiling maps directly to the two competing reads on the same data: the bear case assumes the 2026 revenue shortfall reflects structural share loss to ADP and Workday, while the bull case treats it as a sales-retraining lag ahead of the March 23 S&P 500 removal-driven forced selling.
What Does the Valuation Model Say?
The TIKR mid-case target of $184.23 requires only a 6.8% revenue CAGR through December 2030, a rate already underperformed relative to Paycom’s 10-year historical CAGR of 24.8%, implying the model demands far less than the company has historically delivered.
The market is pricing PAYC at 12x NTM earnings, down from 19x three months ago, despite FCF margins expanding 180 bps to 19.9% in 2025 and projected to reach 22.2% in 2026.
The TIKR model’s $184.23 target rests on FCF reaching $490 million in 2026, a figure grounded in the company’s own $950–$970 million EBITDA guide and the $100 million data center CapEx cycle that peaked in 2025.
IWant usage surging 80% in January alone signals accelerating product adoption, and management’s expansion of sales teams from 8 to 10 directly addresses the execution gap the market is currently penalizing.
The March 23 S&P 500 removal triggers index fund selling, and if 2026 recurring revenue growth fails to approach the 7–8% guided range by mid-year, the TIKR model’s 6.8% revenue CAGR assumption breaks, putting the $184.23 target at risk.
Q2 2026 earnings will be the first clean read on whether the retrained 10-team sales force is converting the new go-to-market pitch; watch recurring revenue growth rate against the 7–8% full-year guide.
Should You Invest in Paycom Software, Inc.?
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