Paycom (PAYC) to Report Q4 Earnings: What's in the Cards?
Paycom Software PAYC is scheduled to report fourth-quarter 2022 results on Feb 7.
The company projects revenues between $366 million and $368 million for the fourth quarter. The Zacks Consensus Estimate for revenues is pegged at $367.1 million, indicating an increase of 28.8% year over year. The consensus mark for earnings stands at $1.46 per share, suggesting a 31.5% rise from the prior-year quarter.
Paycom estimates adjusted EBITDA in the range of $144 million-$146 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 7.7%.
Paycom Software, Inc. Price and EPS Surprise
Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote
Factors to Consider
Paycom’s fourth-quarter performance is likely to have benefited from the strong demand for the latest products, new business wins and the high-margin recurring revenue business. The company’s employee usage strategy, sales efforts and investments might have contributed to sales growth in the quarter to be reported.
The cloud-based human capital management solution provider earlier announced its intention to aggressively drive advertising and marketing efforts to generate more demo leads, virtual meetings and increased close rates of deals. These are likely to have led to market share gains for Paycom.
The company continues to expect the strong adoption of the BETI solution, the industry-first technology that empowers employees to do their payroll among clients, aiding them in avoiding time-consuming manual checks. We anticipate new client additions to have driven the top line in the fourth quarter.
However, Paycom’s quarterly performance is expected to have been affected by macroeconomic uncertainty-triggered economic and business disruptions, which might have hurt the headcount across its client base. Enterprises are postponing their large IT spending plans due to the weakening global economy amid ongoing macroeconomic and geopolitical issues.
What Our Model Unveils
Our proven model does not conclusively predict an earnings beat for PAYC this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though Paycom currently carries a Zacks Rank of #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Analog Devices ADI, Check Point Software CHKP and Cisco Systems CSCO have the right combination of elements to post an earnings beat in their upcoming releases.
Analog Devices is slated to report first-quarter fiscal 2023 results on Feb 15. The company has a Zacks Rank #3 and an Earnings ESP of +1.13% at present. ADI’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 7.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.59 per share, suggesting an increase of 33.5% from the year-ago quarter’s earnings of $1.94. Analog Devices’ quarterly revenues are estimated to increase 17.3% year over year to $3.15 billion.
Check Point carries a Zacks Rank #3 and has an Earnings ESP of +1.22%. The company is scheduled to report fourth-quarter 2022 results on Feb 13. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 3.6%.
The Zacks Consensus Estimate for Check Point’s fourth-quarter earnings stands at $2.35 per share, implying a year-over-year increase of 4.4%. It is estimated to report revenues of $633.6 million, which suggests growth of 5.8% from the year-ago quarter.
Cisco carries a Zacks Rank #3 and has an Earnings ESP of +1.66%. The company is slated to report second-quarter fiscal 2023 results on Feb 15. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 2.1%.
The Zacks Consensus Estimate for CSCO’s fiscal second-quarter earnings is pegged at 86 per share, indicating a year-over-year increase of 2.4%. The consensus mark for revenues stands at $13.43 billion, suggesting a year-over-year increase of 5.6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Analog Devices, Inc. (ADI) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report
Paycom Software, Inc. (PAYC) : Free Stock Analysis Report
To read this article on Zacks.com click here.