Paycom undervalued at forward P/E 19 as target cuts to $183
Paycom’s consensus price target fell from $216.54 to $183 while one analyst projects $368, signaling mixed forecasts. The stock trades at a forward P/E of 19—below HCM peers—and expects Q4 revenue and EPS growth fueled by AI-powered products and strong recurring subscription streams.
1. Consensus Price Target Changes
Analysts reduced Paycom's average price target from $216.54 last year to $183 recently, reflecting conservative forecasts, while one analyst remains bullish with a $368 target.
2. Valuation and Stock Performance
The stock's forward P/E of 19 trades below HCM peers such as ADP and PAYX; shares rose 4.4% on high volume.
3. Q4 Growth Expectations
Paycom is projected to deliver steady Q4 revenue and EPS growth, driven by its AI-powered human capital management tools and strong recurring subscription streams.
4. Challenges and Outlook
Negative sentiment toward AI, a slowing U.S. labor market, and BETI rollout revenue issues weighed on performance, but Q4 results and new guidance could trigger a revaluation and renewed revenue growth in 2026.