Paycom Software Inc. Common Stock (PAYC) fair value

ACCE thesis

Paycom sells a single-platform cloud HCM suite (payroll, time and attendance, talent, and benefits administration) to mid-sized U.S. employers, and it runs most of the software itself rather than reselling third-party modules. That single-codebase design is the moat: gross margin of 88.1% and a 31.7% operating margin reflect a product that is cheap to serve once built, while 41.1% return on equity shows the capital base is not bloated. The near-term question is whether revenue growth of 9.8% can hold as the company pushes further into the mid-market and benefits outsourcing, where a forward P/E of 16.7 against a trailing 25.0 implies the market expects earnings to expand faster than sales. At roughly $11.4 billion of market capitalization and no index membership, the name sits in the mid-cap range where a concentrated book can own it without crowding, and the 81/100 composite score makes it worth a closer look at the margin durability and churn data before anything else.