2024-01-29 09:46:15 ET
Summary
- Paycom guided to 10%-12% FY24 revenue growth, a halving from its past 3-year sales growth of 25%.
- Paycom is trading in line with peers despite maintaining superior margins, and trading at a steep discount relative to historical multiples.
- Founder and CEO still retains a sizeable stake in the business of 14% and future compensation is tied to continued share price growth.
- Paycom is a BUY for the investor looking to buy into a founder-led, profitable SaaS company, a large and growing TAM, and a proven track record.
Investment Thesis
I believe Paycom Software, Inc. ( PAYC ) to be a BUY and believe it is worth a look for bargain-hunting investors, as the current valuation is undemanding for a company that is able to churn out high growth rates, as well as maintain industry-leading profitability and cashflows.
Paycom still offers a healthy mix of both growth, and profitability, and will continue to take share from legacy incumbent players due to the unique paradigm shift it is bringing to the industry....
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Paycom: Undemanding Valuation For A Quality SaaS Stock