Company Description
Paychex, Inc. (NASDAQ:PAYX) is a provider of human capital management (“HCM”) solutions for payroll, benefits, and human resource insurance services for small- to medium-sized businesses, with an outreach to nearly 700,000 clients. The company offers a wide array of services: from payroll processing and tax administration to regulatory compliance and HR solutions.
Valuation
The payroll processing space is fairly small, with ADP (NASDAQ:ADP) being the only other major competitor. We keep in mind our current P/E multiple (on 2020 earnings) of 32x for ADP when we conduct the valuation