Payroll and human resources software provider, Paychex (NASDAQ:PAYX) will be announcing earnings results tomorrow before market open. Here’s what investors should know.
Paychex met analysts’ revenue expectations last quarter, reporting revenues of $1.30 billion, up 5.3% year on year. It was a mixed quarter for the company. Looking ahead to the full year, revenue guidance was slightly below expectations but EPS guidance was slightly above.
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This quarter, analysts are expecting Paychex’s revenue to grow 2.1% year on year to $1.31 billion, slowing from the 6.6% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.14 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Paychex has missed Wall Street’s revenue estimates twice over the last two years.
With Paychex being the first among its peers to report earnings this season, we don’t have anywhere else to look to get a hint at how this quarter will unravel for finance and HR software stocks. However, there has been positive investor sentiment in the segment, with share prices up 4.6% on average over the last month. Paychex’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $124.30 (compared to the current share price of $132.99).
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