A prudent investment decision involves buying well-performing stocks at the right time while selling those at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
Paychex, Inc. PAYX has performed exceptionally well lately, and has the potential to sustain its momentum in the near term. Consequently, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Paychex an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse over the past year. Shares of Paychex have gained 4.8% over the past year, outperforming the 1.3% growth of the industry it belongs to and 12.8% loss of the Zacks S&P 500 composite.
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Solid Zacks Rank: Paychex has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions:The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 90 days, the Zacks Consensus Estimate for Paychex’s 2023 and 2024 earnings has moved up 0.5% and 0.2%, respectively.
Positive Earnings Surprise History: Paychex has an impressive earnings surprise history. The company delivered an earnings surprise of 9.6% in the last four quarters, on average.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For first-quarter fiscal 2023, Paychex’s earnings are expected to register 10.1% growth. For full-year 2023 and 2024, the company’s earnings are expected to grow at 8.2% and 7.4%, respectively, year over year. The company has a long-term earnings growth rate of 7.5%.
Growth Factors: Paychex looks strong on the back of solid top-line growth and a dominant position in the outsourcing market. Buyouts have expanded the company's customer base and generated cost and revenue synergies. The company strives to capitalize on the rising opportunities in the professional employer organization industry. Consistency in dividend payout and share buybacks boost investors' confidence and positively impact earnings per share.
Other Stocks to Consider
Some other stocks in the broader Business Services sector that investors can consider are Cross Country Healthcare CCRN, Avis Budget CAR and Genpact Limited G. While Cross Country Healthcare and Avis Budget sport a Zacks Rank #1, Genpact carries a Zacks Rank #2.
Cross Country Healthcare has an expected earnings growth rate of 55.9% for the current year. CCRN has a trailing four-quarter earnings surprise of 29.2%, on average.
Cross Country Healthcare has a long-term earnings growth rate of 6.9%.
Avis Budget has an expected earnings growth rate of 74.7% for the current year. CAR delivered a trailing four-quarter earnings surprise of 102.1%, on average.
Avis Budget has a long-term earnings growth rate of 19.4%.
Genpact has an expected earnings growth rate of 10.6% for the current year. Genpact delivered a trailing four-quarter earnings surprise of 13.3%, on average.
Genpact has a long-term earnings growth rate of 12.3%.
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Paychex, Inc. (PAYX) : Free Stock Analysis Report
Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
Genpact Limited (G) : Free Stock Analysis Report
Cross Country Healthcare, Inc. (CCRN) : Free Stock Analysis Report
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