Piper Sandler analyst Arvind Ramnani downgraded Paycom Software Inc (NYSE: PAYC) from Overweight to Neutral and lowered the price target from $399 to $185.
PAYC’s revenue growth was below expectations, and initial FY24 revenue targets were 11% at the mid-point.
While the company had talked down expectations in August, revenue is decelerating faster than anticipated. Underlying drivers include macro headwinds, BETI cannibalization, and “strategic initiatives” that “strengthen the value clients receive.”
The analyst projects Q4 revenue of $422.3 million (consensus $452.27 million) and EPS of $1.82 (consensus $1.99).
Keybanc analyst Jason Celino downgraded Paycom from Overweight to Sector Weight.
The re-rating reflects the heightened near-term execution risk, posing a more challenging path to high-teens and low-20% growth. PAYC posted lower 3Q results and 4Q guide, attributing shortfall to BETI cannibalization, lower cross-sell activity, and macro. More importantly, PAYC sees headwinds continuing into 2024 and provided a meaningfully lower initial growth outlook of 10-12% (vs. consensus 21%).
The analyst projects Q4 revenue of $422.8 million (prior $452.3 million) and EPS of $1.80.
Needham analyst Joshua Reilly downgraded Paycom from Buy to Hold.
Stifel analyst Brad ...