- Paychex provides human resources and payroll services mostly for small to medium-sized businesses and startups who are looking to outsource their operations.
- The company's rising revenues show that it is being able to take advantage of the changing nature of the workplace, and this, in a profitable way.
- Equally important, it emphasizes employee retention and satisfaction, two key factors in the ongoing Great Resignation phenomenon.
- Based on the upgraded guidance for the full year, better profitability, and debt metrics, I consider that Paychex is a buy after comparing its valuations with a peer.
- There are risks, especially from European operations, but operating in an expanding market, this remains an unconventional IT stock as evidenced by the price action.
For further details see:
Paychex: Geared Towards Employee Retention And Helped By The Great Resignation