PAYC vs PAYX: Paycom vs Paychex Stock Comparison: AI Score, Valuation, Performance and Upside
Paycom is a cloud HCM platform targeting the midmarket with a differentiated Beti employee self-service payroll, while Paychex is the leading SMB payroll and HCM provider with float income and 30+ years of dividend growth. Paycom is the innovative midmarket HCM player; Paychex is the reliable SMB payroll income compounder.
PAYC vs PAYX is midmarket HCM innovation via Beti versus SMB payroll and float income compounding — Paycom wins if Beti differentiation sustains net new client growth and ARPU expansion; Paychex wins if SMB payroll market stability, float income, and accountant distribution compound earnings consistently.
PAYC holds the edge across 4 of 5 key metrics in this comparison. PAYC leads on both 1-year return (+26.75%) and forward P/E quality (16.63x vs 19.89x for PAYX), a relatively favorable combination of momentum and valuation. PAYX leads on both revenue growth (12.50%) and operating margin (38.32%), suggesting a stronger fundamental setup on both dimensions. Analyst consensus implies meaningfully more upside for PAYC (-5.16%) than for PAYX (-12.34%).
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- want midmarket HCM SaaS with Beti's differentiated employee self-service payroll innovation
- prefer Paycom's single-database architecture as a structural quality advantage over multi-system competitors
- believe ARPU expansion through Beti and analytics can offset slower client count growth
- prefer a software-oriented HCM investment over Paychex's payroll services model
- prefer SMB payroll market leadership with accountant distribution and 30+ years of dividend growth
- value float income as a significant NII contributor that benefits from higher interest rates
- want a reliable dividend compounder in technology software with a defensive SMB payroll moat
- prefer lower product execution risk relative to Paycom's Beti-driven ARPU expansion thesis
| Metric | PAYC | PAYX |
|---|---|---|
| AI scorei | 45.8 | 38.4 |
| AI ranki | #707 | #1087 |
| Latest closei | $252.87 | $110.78 |
| 1M returni | +11.51% | -6.36% |
| 3M returni | +68.04% | -3.42% |
| 6M returni | +101.44% | +20.24% |
| 1Y returni | +26.75% | -13.13% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | PAYC | PAYX |
|---|---|---|
| 1Y ago | $12.61K (+26.1%) started 2025-10-16 | $8.76K (-12.4%) started 2025-10-16 |
| 5Y ago | $5K (-50.0%) started 2021-10-18 | $11.42K (+14.2%) started 2021-10-18 |
| 10Y ago | $52.27K (+422.7%) started 2016-10-17 | $34.63K (+246.3%) started 2016-10-17 |
Hypothetical — past performance does not guarantee future results.
| Metric | PAYC | PAYX |
|---|---|---|
| Market capi | $10.47B | $45.19B |
| Trailing P/Ei | 24.57 | 25.98 |
| Forward P/Ei | 16.63 | 19.89 |
| Price/Salesi | 7.78 | 10.58 |
| EV/Revenuei | 5.17 | 12.27 |
| Analyst targeti | $220.24 | $111.36 |
| Target upsidei | -5.16% | -12.34% |
| Metric | PAYC | PAYX |
|---|---|---|
| Revenue growthi | 9.80% | 12.50% |
| Earnings growthi | 48.10% | 43.40% |
| EPS growthi | +48.10% | +43.40% |
| FCF margini | +19.79% | +50.33% |
| Operating margini | 31.72% | 38.32% |
| Profit margini | 22.78% | 26.63% |
| ROIC proxyi | 41.09% | 40.26% |
| Return on equityi | 41.09% | 40.26% |
| Dividend yieldi | 0.65% | 3.75% |
| Payout ratioi | 15.87% | 90.08% |
| Dividend growth streaki | No increase yet | No increase yet |
| Betai | 0.83 | 0.89 |
| Debt/equityi | 171.97 | 123.97 |
| Current ratioi | 1.07 | 1.15 |
| Quick ratioi | 0.08 | 0.30 |
Over the past year, PAYC and PAYX have moved moderately in the same direction (correlation of 0.67), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | PAYC | PAYX |
|---|---|---|---|
| 1Y | Growthi | +26.13% | -12.42% |
| CAGRi | +26.18% | -12.44% | |
| Volatilityi | 47.66% | 29.96% | |
| Sharpe ratioi | 0.63 | -0.44 | |
| Sortino ratioi | 1.03 | -0.60 | |
| Max drawdowni | 45.09% | 32.91% | |
| Current drawdowni | 0.00% | 13.14% | |
| Avg drawdowni | 24.66% | 17.03% | |
| Ulcer Indexi | 28.37% | 19.15% | |
| Max daily dropi | 10.72% | 8.77% | |
| Max wkly dropi | 13.33% | 13.66% | |
| 5Y | Growthi | -50.76% | +2.39% |
| CAGRi | -13.23% | +0.47% | |
| Volatilityi | 46.28% | 25.00% | |
| Sharpe ratioi | -0.16 | -0.04 | |
| Sortino ratioi | -0.22 | -0.05 | |
| Max drawdowni | 79.16% | 46.45% | |
| Current drawdowni | 53.62% | 30.67% | |
| Avg drawdowni | 55.65% | 14.67% | |
| Ulcer Indexi | 57.66% | 18.70% | |
| Max daily dropi | 38.49% | 9.40% | |
| Max wkly dropi | 39.26% | 13.66% | |
| 10Y | Growthi | +415.07% | +157.80% |
| CAGRi | +17.82% | +9.94% | |
| Volatilityi | 45.38% | 25.77% | |
| Sharpe ratioi | 0.50 | 0.32 | |
| Sortino ratioi | 0.70 | 0.45 | |
| Max drawdowni | 79.16% | 46.45% | |
| Current drawdowni | 53.62% | 30.67% | |
| Avg drawdowni | 32.33% | 10.19% | |
| Ulcer Indexi | 41.81% | 14.62% | |
| Max daily dropi | 38.49% | 19.48% | |
| Max wkly dropi | 39.26% | 27.38% |
| Category | PAYC | PAYX |
|---|---|---|
| Company | Paycom Software, Inc. | Paychex, Inc. |
| Sector | Technology | Technology |
| Industry | Software - Application | Software - Application |
| Core business | Cloud-based HCM platform for US midmarket companies with payroll, talent management, HR analytics, and the Beti employee self-service payroll product. Paycom targets companies with 50–10,000 employees. | US payroll and HCM company primarily serving small and mid-size businesses with payroll processing, HR services, benefits administration, and Paychex Flex platform. Paychex also earns float income on employer tax payments held before remittance. |
| Investor focus | Beti adoption and ARPU growth, client count recovery, and operating margin stability. | New business starts and SMB health indicators, Paychex Flex platform adoption, float income in high-rate environments, and dividend growth. |
- Beti is a genuine product innovation — employee-managed payroll reduces HR admin errors and distinguishes Paycom from ADP, Paychex, and Workday
- Single-database architecture prevents data reconciliation errors across HR modules
- Strong operating margins demonstrate pricing power in the midmarket HCM segment
- Paychex is the leading SMB payroll processor in the US with deep accountant distribution relationships
- Float income from holding employer tax payments provides significant NII — a natural benefit from higher interest rates
- 30+ consecutive years of dividend growth makes Paychex one of the most consistent dividend compounders in technology
- Beti's efficiency reduces per-employee processing costs, creating a paradox where the best product outcome suppresses revenue
- Slower client count growth vs prior years suggests midmarket saturation in some geographies
- Competition from Dayforce (Ceridian), Workday, and ADP in the midmarket
- SMB payroll is deeply competitive with ADP, Gusto, and Rippling all targeting small business payroll
- New business start pace slowing reduces Paychex's organic customer acquisition
- Paychex is less differentiated on product innovation vs Paycom's Beti or ADP's Workforce Now AI features
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