Investing.com • Thomas Hughes Paychex Is Out of Favor—And That’s the Opportunity
12/25/2025 07:44 AM • Paychex (PAYX) has declined to 52-week lows amid growth concerns and analyst downgrades, but the company maintains strong fundamentals with 17% revenue growth, healthy labor market demand, and a 3.8% dividend yield. The stock trades at 21x earnings—a discount to its historical 28x average—presenting a potential value opportunity for income investors. AI-driven product rollouts and improving market sentiment could serve as catalysts for a rebound, with analysts targeting around $110 as support and potential 25% upside.
PAYX - Despite recent stock decline and analyst downgrades, the company demonstrates strong fundamentals including 17% revenue growth, raised FY2026 earnings outlook, healthy labor market demand, reliable 3.8% dividend yield with annual increases, and upcoming AI product catalysts. The stock is trading at a significant discount to historical valuations (21x vs. 28x average), presenting deep value opportunity with 25-100% upside potential over various timeframes.