PAYX - Paychex: Uncertainties Ahead Are Keeping Me On The Sidelines

2024-06-21 03:36:53 ET

Summary

• Paychex Inc. is set to report Q4 '24 earnings, with steady revenue growth and healthy margins.
• The company faces potential challenges ahead due to a slight increase in unemployment, leading to a possible slowdown in revenue growth.
• Analysts expect a decline in EPS and revenue for Q4, with the potential for a miss on revenues due to recent guidance adjustments.
• More uncertainty in the next year or two, which keeps me from starting a position.

Introduction

Paychex Inc ( PAYX ) is going to report its Q4 ’24 earnings next week on the 26 ^th of June, so I wanted to have a look at how the company performed throughout 2023, and whether it would be a good time to start a position. The company benefitted from a resilient US economy, however, with unemployment starting to tick up slightly, I believe there will be more pain ahead, which will lead to a slowdown in revenue growth and margin deterioration in the short term. It is not a good time to start a position right now....

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