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Paychex

PAYX
69
Staffing & Employment Services · Industrials
Exchange
NASDAQ
Winston Score
69
Winston is curious
A decent business — some strong pillars, some weaker.

Paychex, Inc. provides integrated human capital management solutions for human resources (HR), payroll, benefits, and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing. The company also provides HR solutions, including payroll, employer compliance, HR and empl

Winston Score History

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+19.9% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+8.3% YoY

YoY Growth Rate

Slow EPS growth

Insider Activity

10.2%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1.8B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Paychex is a rare growth stock that's already generating positive cash flow while growing at 20%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin
76.2%
Premium pricing power — 76.2% gross margin
Operating Margin
43.8%
Excellent — 43.8% operating margin
ROCE
8.8%
Below par — 8.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY
+12.7%
Fast-growing sales (12.7% YoY)
EPS YoY
+5.4%
Modest earnings growth (5.4% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion
134%
Turns 134% of profit into real cash
FCF Margin
34.2%
Converts sales into free cash efficiently (34.2%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity
1.23
Elevated debt (1.23)
Interest Cover
11.16x
Comfortably covers interest (11.2x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
22.3x
no trend
Growth-priced — P/E 22.3

P/E above the market average. People are paying up for expected growth.

P/E vs Forward
+5.6
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (22.3 → 16.7)

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Dividends

Dividend Yield
4.43%
no trend
Healthy income — 4.43% yield

Generous yield. Worth checking whether the payout is sustainable.

Dividend Growth
+10.2%
no trend
Dividend growing fast (10.2% YoY)

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