Shares of Paycom Software, Inc. (NYSE:PAYC) , a business and financial software company, have been performing well of late.
If you haven’t taken advantage of the share price appreciation yet, it is time you buy the stock as it looks promising and is likely to carry the momentum ahead. This Zacks Rank #2 (Buy) stock has an estimated long-term earnings growth rate of 28.4%.
Positive Earnings Surprise History
Paycom outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering an encouraging average positive earnings surprise of 36.1%.
Ahead of the Industry
Paycom stock has gained 80.3% year over year, outperforming the 31.2% rally of the industry it belongs to.
Strong Results, Encouraging Guidance
The company’s non-GAAP earnings per share for the third-quarter 2017 came in at 29 cents per share, which beat the Zacks Consensus Estimate of 19 cents. Also, reported earnings increased from 15 cents earned in the year-ago quarter.
Paycom Software reported revenues of $101.3 million, which increased 30.9% from the year-ago quarter. Revenues also beat the Zacks Consensus Estimate of $100 million.
Additionally, Paycom Software updated fiscal 2017 guidance. The company now anticipates revenues in a range of $430.5-$432.5 million (previously $429.5-$431.5 million). The Zacks Consensus Estimate is pegged at $431.4 million. Adjusted EBITDA is now anticipated to be approximately in a range of $131-$133 million (previously $122.5-$124.5 million).
Growth Drivers
The company’s top-line is being positively impacted by higher recurring revenues and higher traction in cloud-based offerings. A surge in demand for advanced human capital management and payroll software solutions is an additional tailwind.
We believe that the higher adoption of Paycom Software’s Affordable Care Act (“ACA”) dashboard application that tracks employee count, employee status and health care plan affordability will be a revenue booster in the long run. Further, successful cross-selling of newer products to the existing client base will be beneficial for revenue growth going ahead.
Other Key Picks
Some of the top-ranked stocks in the broader technology sector are NVIDIA Corporation (NASDAQ:NVDA) and IPG Photonics Corporation (NASDAQ:IPGP) , both sporting a Zacks Rank #1 (Strong Buy) and Intel Corporation (NASDAQ:INTC) , with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected EPS growth rate for Intel, NVIDIA and IPG is projected to be 8.42%, 10.25% and 12%, respectively.
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Paycom Software, Inc. (PAYC): Free Stock Analysis Report
IPG Photonics Corporation (IPGP): Free Stock Analysis Report
Intel Corporation (INTC): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
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