Cybersecurity Risks - The company has experienced significant cybersecurity risks, including breaches that could lead to unauthorized access to sensitive client data, potentially harming client relationships and incurring liabilities [117]. - The company relies on third-party relationships for data management, which poses additional cybersecurity risks, as past incidents have shown unauthorized access to client data through these vendors [118]. - The company has invested significantly in enhancing its cybersecurity measures, but ongoing threats from increasingly sophisticated cyber-attacks necessitate continuous investment in security controls [119]. Operational Risks - The company’s network infrastructure is critical for service delivery, and any damage or disruption could impair operations and harm its reputation, potentially leading to revenue loss [121]. - The company faces risks from potential defects in its applications, which could lead to significant costs and reputational damage if clients experience service interruptions [132]. - The company relies on in-house deployment personnel to implement and configure solutions, emphasizing the importance of client satisfaction to avoid additional costs and negative impacts on profitability [134]. - Third-party relationships are crucial for delivering services, and failures in these partnerships could negatively affect the company's reputation and operational capabilities [144]. Market Competition - The company must continuously innovate and enhance its applications to remain competitive, as failure to do so could adversely affect its market position and financial performance [123]. - The competitive landscape for HCM software is intense, with pressure from competitors offering lower prices and more integrated solutions, which could impact client retention and sales [126]. - Challenges in attracting larger clients include demand for customized features and longer sales cycles, which may limit market opportunities if not addressed [135]. Client Retention and Satisfaction - The company’s annual revenue retention rate is sensitive to client satisfaction and market conditions, with potential declines if clients reduce their use of applications or do not purchase additional services [130]. - The company’s ability to attract and retain clients is contingent on maintaining high service quality and addressing any performance issues promptly to avoid negative publicity [132]. Leadership and Talent Management - The company is dependent on key executives for leadership, and their loss could adversely affect operations and client relationships [136]. - Attracting and retaining qualified personnel, particularly in software development and IT, is critical for the company's growth and ability to enhance existing products [138]. - The company faces increased competition for talent due to new immigration laws, which could raise costs and hinder recruitment efforts [139]. Financial and Regulatory Risks - Significant growth in operations has created demands on management and resources, necessitating improvements in operational and financial controls [140]. - The company is expanding internationally, which involves regulatory, economic, and political risks that could impact business performance [143]. - The company may incur additional compliance costs due to increasing regulatory scrutiny on its automation initiatives, particularly AI-powered tools [152]. - Changes in laws and regulations could materially affect the company's business and operational costs, particularly regarding compliance with government regulations [160]. - The company is subject to various privacy and data protection laws, with non-compliance potentially leading to significant fines and reputational harm [164]. Financial Performance and Reporting - Financial results may fluctuate significantly due to various factors, including client acquisition, seasonal revenue patterns, and economic conditions [187]. - The company has historically experienced seasonality in revenues, particularly related to payroll tax filings, which positively impact first and fourth quarter revenues [188]. - The company must maintain effective internal control over financial reporting, as material weaknesses could lead to misstatements and loss of investor confidence [194]. - The company's actual operating results may differ significantly from guidance provided, which is based on projections subject to uncertainties beyond its control [195]. Investment and Cash Management - As of December 31, 2025, the company had corporate cash and cash equivalents totaling $370.0 million and funds held for clients amounting to $4.8 billion [338]. - The company had available-for-sale securities totaling $374.5 million, primarily consisting of U.S. treasury securities with original maturities of two years or less [338]. - A hypothetical increase or decrease in interest rates of 100 basis points would result in an approximately $22.1 million increase or decrease in interest earned on funds held for clients over the ensuing 12-month period [341]. - An immediate increase in interest rates of 100 basis points would have resulted in a $1.7 million reduction in the aggregate market value of available-for-sale securities as of December 31, 2025 [342]. - The company’s investments are subject to market risk due to changes in interest rates, which may affect future investment income [339]. - The company does not enter into investments for trading or speculative purposes, focusing instead on capital preservation and liquidity needs [338]. Strategic Acquisitions and Corporate Governance - The company intends to evaluate strategic acquisitions in the future, which may involve issuing additional equity securities [201]. - Anti-takeover provisions in the company’s charter may delay or prevent changes in control or management, potentially affecting stockholder opportunities [203].

Core Viewpoint - Paycom Software, Inc. has announced the promotion of Shane Hadlock to president, effective immediately, highlighting the company's commitment to strategic operations and automation strategy [1] Company Summary - Shane Hadlock will also serve as chief client officer, overseeing the company's strategic operations and cross-functional alignment [1] - Hadlock has been instrumental in driving meaningful initiatives within the company [1]

Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators that help investors select stocks likely to outperform the market in the next 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Value Score focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales [3] - The Growth Score evaluates a company's future prospects through projected and historical earnings, sales, and cash flow [4] - The Momentum Score identifies trends in stock prices and earnings outlooks, helping investors time their positions [5] - The VGM Score combines the three Style Scores to highlight stocks with attractive value, growth forecasts, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to assist investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have produced an average annual return of +23.83% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 top-rated stocks available, making it essential for investors to utilize Style Scores for better selection [9] Investment Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - The direction of earnings estimate revisions is crucial; stocks with lower ranks but high Style Scores may still face downward price pressure [11] Company Spotlight: Paycom Software - Paycom Software, Inc. is a provider of cloud-based human capital management software, currently rated 3 (Hold) with a VGM Score of B [12] - The company has a forward P/E ratio of 12.01, indicating attractive valuation metrics for value investors [12] - Recent upward revision of earnings estimates for fiscal 2026 has increased the Zacks Consensus Estimate to $9.97 per share, with an average earnings surprise of +5.7% [13]

Core Viewpoint - Paycom Software, Inc. (PAYC) reported its Q4 and full-year numbers, which were perceived as a mixed bag, indicating varying performance metrics that may affect investor sentiment [1]. Financial Performance - The company’s Q4 and full-year results were highlighted, but specific figures and performance metrics were not detailed in the provided text [1]. Investment Perspective - The analysis suggests a long-term investment horizon of 5-10 years, emphasizing a portfolio that includes a mix of growth, value, and dividend-paying stocks, with a particular focus on value [1].

Core Insights - Paycom Software, Inc. (PAYC) reported better-than-expected fourth-quarter 2025 results, with both earnings and revenues surpassing the Zacks Consensus Estimate [1][11] Financial Performance - Non-GAAP earnings were $2.45 per share, beating the Zacks Consensus Estimate of $2.44, and increased by 5.6% year over year due to higher revenues, operating efficiency, and lower income taxes [1][2] - Revenues reached $544.3 million, exceeding the consensus mark of $542.7 million, and grew by 10.2% year over year, driven by increased sales momentum, international expansion, and AI integration [3][11] - Recurring revenues, which account for 95% of total revenues, improved by 11.2% to $517.1 million, surpassing the estimate of $515.2 million [4][11] - Adjusted gross profits rose by 11.3% to $459.4 million, with an adjusted gross margin expansion of 80 basis points to 84.4% [5][11] - Adjusted EBITDA increased by 9.9% year over year to $236.3 million, although the adjusted EBITDA margin contracted slightly by 10 basis points to 43.4% [5] Cash Flow and Balance Sheet - As of December 31, 2025, Paycom had cash and cash equivalents of $370 million and no debt [6] - In Q4 2025, the company generated operating cash flow of approximately $196.1 million, paid out $20.6 million in dividends, and repurchased $108.8 million of its common stock [7] - For the full year 2025, operating cash flow was $678.9 million, with $84.8 million in dividends paid and $325.5 million in stock buybacks [7] Future Guidance - Paycom initiated its revenue guidance for 2026, forecasting revenues between $2.175 billion and $2.195 billion, with a Zacks Consensus Estimate of $2.23 billion, indicating year-over-year growth of 8.8% [9] - The company projects recurring revenues to grow by 7% year over year and expects revenues from interest on funds held for clients to be $103 million [9] - Adjusted EBITDA for 2026 is expected to be between $950 million and $970 million, translating to an EBITDA margin of approximately 44% at the midpoint [10]

Core Insights - Reinhart Partners disclosed a significant purchase of Paycom shares, acquiring 537,726 shares valued at approximately $95.28 million based on quarterly average pricing [1][2] Company Overview - Paycom provides cloud-based human capital management (HCM) software through a SaaS model, offering comprehensive workforce management solutions for small to mid-sized businesses in the United States [5][7] - The company's revenue for the trailing twelve months (TTM) is $2.00 billion, with a net income of $453.20 million and a dividend yield of 1.3% [4] Recent Performance - As of February 10, 2026, Paycom shares were priced at $124.94, reflecting a decline of 38.5% over the past year and trailing the S&P 500 by 53.0 percentage points [3] - The value of Reinhart Partners' stake in Paycom increased by $82.74 million compared to the prior period, influenced by both share purchases and market price changes [2] Market Context - Paycom's stock has experienced a significant decline of approximately 70% since 2021, attributed largely to the emergence of artificial intelligence (AI) impacting traditional software products [8] - Revenue growth for Paycom has slowed from 30% in 2021 to under 10% in 2025, raising concerns about the sustainability of its business model in the face of AI advancements [9]

Core Insights - Paycom Software, Inc. has revealed findings from a commissioned study by Forrester Consulting, which examines the projected benefits of its AI engine, IWant™ [1] Group 1: Company Overview - Paycom is a leading provider of comprehensive, cloud-based human capital management software [1] Group 2: Study Findings - The Forrester study indicates that a composite organization, representative of interviewed Paycom clients, is projected to receive a three-year return on investment [1]

Core Viewpoint - Paycom Software Inc reported strong earnings for Q4, exceeding analyst expectations, but provided a lower sales forecast for FY2026, leading to a decline in share price in pre-market trading [1]. Financial Performance - The company reported quarterly earnings of $2.45 per share, surpassing the analyst consensus estimate of $2.44 per share [1]. - Quarterly sales reached $544.300 million, exceeding the analyst consensus estimate of $543.009 million [1]. Future Outlook - Paycom Software projected FY2026 sales between $2.175 billion and $2.195 billion, which is below market estimates of $2.228 billion [1]. Market Reaction - Following the earnings announcement, Paycom shares fell by 11.4% to $105.09 in pre-market trading [1]. Analyst Ratings and Price Targets - BTIG analyst Allan Verkhovski maintained a Buy rating on Paycom Software but lowered the price target from $195 to $140 [3]. - Mizuho analyst Siti Panigrahi maintained a Neutral rating and reduced the price target from $180 to $120 [3].

Core Viewpoint - Paycom Software forecasts annual revenue for 2026 below Wall Street expectations, leading to a decline in its shares by over 7% in extended trading [1] Company Summary - Paycom Software, a payroll software maker, reported a forecasted revenue range of $2.18 billion to $2.20 billion for 2026, which is below the analysts' average estimate of $2.23 billion [1] - The company reported revenue of $544.3 million for the fourth quarter ended December 31, exceeding analysts' estimates of $543 million [1] Industry Summary - The human capital management market is becoming increasingly competitive, with Paycom facing rivals such as ADP, Paylocity, and Workday [1] - Macroeconomic challenges are impacting new customer acquisition for Paycom, as businesses are delaying or reducing HR and payroll software purchases due to tighter budgets [1] - A slowdown in hiring or job cuts among small- and medium-sized businesses, which are Paycom's core clients, could pose additional challenges [1]

分组1 - Paycom Software reported quarterly earnings of $2.45 per share, exceeding the Zacks Consensus Estimate of $2.44 per share, and showing an increase from $2.32 per share a year ago, representing an earnings surprise of +0.41% [1] - The company achieved revenues of $544.3 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.29%, and up from $493.8 million year-over-year [2] - Paycom has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates four times in the same period [2] 分组2 - The stock has underperformed, losing about 21.6% since the beginning of the year, while the S&P 500 has gained 1.4% [3] - The current consensus EPS estimate for the upcoming quarter is $2.93 on revenues of $578.25 million, and for the current fiscal year, it is $9.94 on revenues of $2.23 billion [7] - The Zacks Industry Rank for Internet - Software is currently in the bottom 44% of over 250 Zacks industries, indicating potential challenges for stock performance [8]