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 3 of 5 key metrics in this comparison. PAYX has delivered stronger 1-year price return (-22.71% vs -33.47%), though PAYC has the better forward P/E setup (11.32x vs 16.83x for PAYX). 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 (+8.66%) than for PAYX (-0.90%).
- →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 score | 44.4 | 38.0 |
| AI rank | #821 | #1400 |
| Latest close | $146.50 | $110.75 |
| 1M return | +8.91% | +10.06% |
| 6M return | -6.79% | -2.65% |
| 1Y return | -33.47% | -22.71% |
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 | $6.6K (-34.0%) started 2025-07-14 | $7.67K (-23.3%) started 2025-07-14 |
| 5Y ago | $4.08K (-59.2%) started 2021-07-14 | $12.36K (+23.6%) started 2021-07-14 |
| 10Y ago | $32.62K (+226.2%) started 2016-07-14 | $32.14K (+221.4%) started 2016-07-14 |
Hypothetical — past performance does not guarantee future results.
| Metric | PAYC | PAYX |
|---|---|---|
| Market cap | $6.48B | $38.24B |
| Trailing P/E | 16.10 | 21.99 |
| Forward P/E | 11.32 | 16.83 |
| Price/Sales | 7.78 | 10.58 |
| EV/Revenue | 3.39 | 10.52 |
| Analyst target | $151.13 | $106.57 |
| Target upside | +8.66% | -0.90% |
| Metric | PAYC | PAYX |
|---|---|---|
| Revenue growth | 7.80% | 12.50% |
| Earnings growth | 22.60% | 42.60% |
| EPS growth | +22.60% | +42.60% |
| FCF margin | +14.08% | +50.33% |
| Operating margin | 36.76% | 38.32% |
| Profit margin | 22.44% | 26.63% |
| ROIC proxy | 37.15% | 40.26% |
| Return on equity | 37.15% | 40.26% |
| Dividend yield | 1.08% | 4.48% |
| Beta | 0.80 | 0.89 |
| Debt/equity | 94.07 | 123.38 |
| Current ratio | 1.08 | 1.15 |
| Quick ratio | 0.08 | 0.30 |
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 | Growth | -34.01% | -23.26% |
| CAGR | -34.12% | -23.34% | |
| Sharpe ratio | -0.99 | -1.04 | |
| Max drawdown | 52.43% | 42.18% | |
| Max daily drop | 10.72% | 5.36% | |
| Max wkly drop | 13.33% | 8.17% | |
| 5Y | Growth | -59.82% | +10.09% |
| CAGR | -16.68% | +1.94% | |
| Sharpe ratio | -0.27 | 0.01 | |
| Max drawdown | 79.16% | 46.45% | |
| Max daily drop | 38.49% | 9.40% | |
| Max wkly drop | 39.26% | 11.37% | |
| 10Y | Growth | +221.44% | +136.85% |
| CAGR | +12.39% | +9.01% | |
| Sharpe ratio | 0.39 | 0.29 | |
| Max drawdown | 79.16% | 46.45% | |
| Max daily drop | 38.49% | 19.48% | |
| Max wkly drop | 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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