Paychex (NASDAQ:PAYX) to Buyback $1.00 billion in Stock

Paychex (NASDAQ:PAYX) declared that its Board of Directors has authorized a share buyback program on Friday, January 16th, RTT News reports. The company plans to repurchase $1.00 billion in outstanding shares. This repurchase authorization authorizes the business services provider to buy up to 2.5% of its shares through open market purchases. Shares repurchase programs are generally a sign that the company’s management believes its stock is undervalued.

Paychex Trading Up 0.6%

Paychex stock opened at $111.18 on Friday. Paychex has a 12 month low of $107.80 and a 12 month high of $161.24. The company has a quick ratio of 1.27, a current ratio of 1.27 and a debt-to-equity ratio of 1.17. The stock has a market cap of $39.91 billion, a P/E ratio of 25.21 and a beta of 0.91. The company’s fifty day simple moving average is $112.25 and its 200-day simple moving average is $126.51.

Paychex (NASDAQ:PAYX) last announced its quarterly earnings data on Friday, December 19th. The business services provider reported $1.26 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.23 by $0.03. Paychex had a return on equity of 46.38% and a net margin of 26.45%.The business had revenue of $1.56 billion during the quarter, compared to analyst estimates of $1.55 billion. During the same period last year, the company earned $1.14 earnings per share. Paychex’s quarterly revenue was up 18.3% compared to the same quarter last year. Paychex has set its FY 2026 guidance at 5.480-5.530 EPS. As a group, sell-side analysts forecast that Paychex will post 4.99 EPS for the current fiscal year.

Paychex Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Friday, February 27th. Stockholders of record on Wednesday, January 28th will be issued a dividend of $1.08 per share. This represents a $4.32 annualized dividend and a dividend yield of 3.9%. The ex-dividend date is Wednesday, January 28th. Paychex’s payout ratio is currently 97.96%.

Wall Street Analysts Forecast Growth

Several brokerages have commented on PAYX. Weiss Ratings reiterated a “hold (c)” rating on shares of Paychex in a report on Monday, December 29th. Robert W. Baird reduced their price target on shares of Paychex from $153.00 to $148.00 and set a “neutral” rating for the company in a research report on Wednesday, October 1st. Stifel Nicolaus decreased their price objective on shares of Paychex from $137.00 to $126.00 and set a “hold” rating for the company in a research note on Wednesday, December 17th. Wolfe Research cut their target price on shares of Paychex from $130.00 to $115.00 and set an “underperform” rating on the stock in a research note on Wednesday, December 10th. Finally, Stephens reduced their target price on Paychex from $135.00 to $125.00 and set an “equal weight” rating for the company in a report on Monday, December 22nd. One equities research analyst has rated the stock with a Buy rating, fourteen have given a Hold rating and three have given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company has a consensus rating of “Reduce” and a consensus price target of $125.67.

Paychex Company Profile

Paychex, Inc, founded in 1971 by B. Thomas “Tom” Golisano and headquartered in Rochester, New York, is a provider of payroll, human resources, and benefits outsourcing solutions for small- and medium-sized businesses. The company’s core services include payroll processing and tax filing, employee benefits administration, retirement services, and workers’ compensation administration, designed to simplify back-office operations and help clients comply with regulatory and tax requirements.

Paychex offers an integrated technology platform, marketed under the Paychex Flex brand, which delivers cloud-based payroll, HR, time and attendance, and reporting tools.