With its shares up 120% over the course of the past 12 months, Paycom Software (NYSE: PAYC) ranks as one of the market's best performers for the timeframe. Even more remarkable, however, is how much investors are willing to pay to plug into the company's admittedly impressive growth. As of the latest look, Paycom shares are priced at more than 70 times this year's expected per-share earnings of $4.28. You do have to pay for quality, but there are logical limits.
When one takes a more thorough look at this company, its backstory, and its trajectory, though, the sustained rally actually makes a lot of sense. Investors have latched onto three particular themes.
To say Paycom Software is a human resources software company understates what the company offers. It offers solutions ranging from recruitment to payroll to benefits management, and more. Not only has a persistently strong job market made finding employees tough, but employees have also raised the bar on how they expect to be treated by employers.