PAYCHEX INC (PAYX) Stock Analysis

Analysis from 10-Q filed 2025-12-22. Data as of Q2 2026.

Overall Grade: F (Concerning)

Grade F (Concerning). ROIC 21.5%. FCF margin 35.7%. D/E 1.2x. Source: 10-Q filed 2025-12-22.

Metric	Value	Context
ROIC	21.5%	Above industry average
FCF Margin	35.7%	Strong cash generation
Debt/Equity	1.2x	Moderate leverage

ROIC 21.5% — Top 10% of sector peers. FCF margin 35.7% — Top 5%.

Explore PAYCHEX INC: Earnings History | Filings

Programmatic access: Available via MCP at mcp.metricduck.com. Tools for PAYX: get_company_overview, get_filing_index (lens: debt_stress, management_outlook, risk_trajectory), get_filing_changes, get_metric_history, compare_companies, screen_filing_signals.

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Profitability: PAYCHEX INC earns 21.5% ROIC, Top 10% in Industrials

ROIC TTM 21.5%, sector median 7.4%, Top 10%. DuPont: NOPAT margin 29.4% × asset turnover 0.4x. Gross margin 74.3%. Operating margin 38.6%. Source: 10-Q filed 2025-12-22.

Metric	PAYX	Rating	Context
Return on Invested Capital (ROIC)	21.5%	Excellent	Above sector median of 7.4%
Return on Equity (ROE)	44.6%	Excellent	Efficient use of shareholder equity
Gross Margin	74.3%	Excellent	Strong pricing power
Operating Margin	38.6%	Excellent	Efficient operations

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Cash Flow: PAYCHEX INC generates $2.3B FCF at 35.7% margin, positive NaN/8 quarters

FCF TTM $2.3B. FCF margin 35.7%, Top 5%. OCF/Net income 1.5x. Positive FCF in NaN/8 trailing quarters. Source: 10-Q filed 2025-12-22.

Metric	PAYX	Rating	Context
Free Cash Flow Margin	35.7%	Excellent	Excellent cash conversion
Free Cash Flow (TTM)	$2.3B	Good	Positive cash generation
OCF/Net Income	1.5x	Excellent	High earnings quality
FCF Consistency (8Q)	N/A	Warning	Variable cash flow

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Balance Sheet: PAYCHEX INC at 1.2x leverage

Debt/Equity 1.2x. Total debt $4.6B, cash & investments $1.1B. Source: 10-Q filed 2025-12-22.

Metric	PAYX	Rating	Context
Debt to Equity	1.2x	Adequate	Moderate leverage
Net Cash Position	$-3.4B	Warning	Net debt position

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Valuation: PAYCHEX INC trades at 19.8x earnings

P/E 19.8x. EV/Sales 7.0x. FCF yield 6.7%. Dividend yield 4.6%. Source: 10-Q filed 2025-12-22.

Metric	PAYX	Rating	Context
P/E Ratio	19.8x	Adequate	Reasonable valuation
EV/Sales	7.0x	Adequate	Growth premium priced in
FCF Yield	6.7%	Good	Attractive cash return
Dividend Yield	4.6%	Good	Meaningful income

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Capital Allocation: PAYCHEX INC returns 6.3% shareholder yield

Total shareholder yield 6.3% (div 4.6% + buyback 1.8%). Capital returned $2.2B TTM. Source: 10-Q filed 2025-12-22.

Metric	PAYX	Rating	Context
Total Shareholder Yield	6.3%	Excellent	Dividend + buyback yield combined
Buyback Yield	1.8%	Adequate	Minimal buyback activity
Total Capital Returned (TTM)	$2.2B	Good	Dividends + buybacks returned to shareholders

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Sector Rankings

Metric	Value	Percentile	vs Median
Return on Invested Capital (ROIC)	21.5%	Top 10%	2.9x above
Free Cash Flow Margin	35.7%	Top 5%	7.6x above
Gross Margin	74.3%	Top 5%	2.3x above
Operating Margin	38.6%	Top 5%	5.3x above
Return on Equity (ROE)	44.6%	Top 5%	4.5x above
P/E Ratio	19.8x	N/A	-

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Financial Scorecard

Metric	PAYX	Rating	Sector Context
Return on Invested Capital (ROIC)	21.5%	Excellent	Top 10% of sector (median: 7.4%)
Free Cash Flow Margin	35.7%	Excellent	Top 5% of sector (median: 4.7%)
Gross Margin	74.3%	Excellent	Top 5% of sector (median: 32.0%)
Debt to Equity Ratio	122.0%	Adequate	Elevated but manageable
P/E Ratio (Price-to-Earnings)	19.8x	Adequate	Fair value
Free Cash Flow Yield	6.7%	Good	Solid cash yield

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Frequently Asked Questions

Q: What is PAYCHEX INC's Return on Invested Capital (ROIC)?

PAYCHEX INC (PAYX) has a trailing twelve-month Return on Invested Capital (ROIC) of 21.5%. Sector median 7.4%. Source: 10-Q filed 2025-12-22.

Q: What is PAYCHEX INC's Free Cash Flow Margin?

PAYCHEX INC (PAYX) has a free cash flow margin of 35.7%, generating $2.3 billion in free cash flow over the trailing twelve months. Source: 10-Q filed 2025-12-22.

Q: What is PAYCHEX INC's P/E ratio and how does it compare to peers?

PAYCHEX INC (PAYX) trades at a P/E ratio of 19.8x, which is above the sector median of N/A. EV/Sales 7.0x. FCF yield 6.7%. Source: 10-Q filed 2025-12-22.

Q: Does PAYCHEX INC pay a dividend?

PAYCHEX INC (PAYX) currently pays a dividend yield of 4.6%. Total shareholder yield (dividend + buybacks) 6.3%. Source: 10-Q filed 2025-12-22.

Q: How much debt does PAYCHEX INC have?

PAYCHEX INC (PAYX) has a debt-to-equity ratio of 1.2x with total debt of $4.6 billion. Net debt $3.4 billion. Source: 10-Q filed 2025-12-22.

Q: What is PAYCHEX INC's revenue and earnings growth?

PAYCHEX INC (PAYX) grew revenue by 16.9% year-over-year. EPS +6.8% YoY. Source: 10-Q filed 2025-12-22.

Q: Is PAYCHEX INC buying back stock?

PAYCHEX INC (PAYX) repurchased $611.0 million of stock over the trailing twelve months. This represents a buyback yield of 1.8%. Source: 10-Q filed 2025-12-22.

Q: How does PAYCHEX INC compare to competitors in Industrials?

Compared to other companies in Industrials, PAYCHEX INC (PAYX) shows: ROIC 21.5%, sector median 7.4% (Top 10%). FCF margin 35.7%, sector median 4.7% (Top 5%). Gross margin 74.3%, 42.3pp above sector median. These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.

Q: What warning signs should I watch for with PAYCHEX INC?

Quantitative warning flags for PAYCHEX INC (PAYX): 1) ROIC declining -18.1% over 8 quarters. Source: 10-Q filed 2025-12-22.

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Data Source: Data sourced from 10-Q filed 2025-12-22. TTM metrics as of Q2 2026.

Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.

Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.

This analysis is for informational purposes only and does not constitute investment advice.