PAYC results

Paycom’s results look pretty good.

Stock up over 8% in after hours trading.

https://finance.yahoo.com/news/paycom-software-inc-reports-f…

5 Likes

Here’s a quick look at the company’s numbers. I went long last week, buying it at just a shade over $43. I think this is the first time ever I got in on a stock at the low of a dip or when it went immediately higher afterward. At least, it seems like it!


Revenue (millions)	Q1		Q2		Q3		Q4			
2014									44.040
2015			55.222		48.973		55.340		65.118
2016			90.126		73.880		77.325		87.810

EPS (non-GAAP)	        Q1		Q2		Q3		Q4	
2014									0.06	
2015			0.12		0.10		0.08		0.10
2016			0.33		0.21		0.15		0.18

2016 Q4 Earnings Growth (Current):

Revenue Growth (millions)
2015 Q4 TTM Revenue = 224.653
2016 Q4 TTM Revenue = 329.141
Year Over Year TTM Revenue Growth = 46.5%, previous quarter 50.5%

EPS Growth (non-GAAP)
2015 Q4 TTM Earnings = 0.40
2016 Q4 TTM Earnings = 0.87
Year Over Year TTM EPS Growth = 117.5%, previous quarter 119%

P/E (Check Current Price) = 45.26/0.87 = 52

1YPEG = 52/117.5 = 0.44

Guidance looks pretty decent at first glance. Management is projecting about 25% revenue growth year over year for 2017 Q1 and about 30% full year growth.

You can see the press release at http://investors.paycom.com/press-releases/press-release-det…

Matt
Long PAYC
MasterCard (MA), Nestle (NSRGY), PayPal (PYPL), and Verizon (VZ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

12 Likes

Thanks for the quick dissection Matt. I thought the numbers looked awesome and the guidance looks insanely good.

For once one of my trades worked out - I’m very glad I moved my Skyworks sales proceeds into PayCom last week!

I noticed its recovery mirrors WorkDay (except for the AH pop last night). Paycom are forecasting a beat with 30% 2017 rise in revenues to $423m whilst WorkDay missed with a forecast of 32% rise to $430m in revenues. I always considered Paycom niched compared with WorkDay but this recent growth spurt has got them in touch.

Ant

Thanks Matt

Looking at Revenue:

2013: $108
2014: $150
2015: $225
2016: $329

Pretty impressive. And up 46.5% even this last year with larger numbers.

Looking at adjusted EPS:

2013: 02
2014: 18
2015: 40
2016: 87

Up at least 100% every year. (That can’t last so don’t be disappointed when it drops to something reasonable like 95%.)

(:wink:

Saul

4 Likes

Looking at adjusted EPS:

2013: 02
2014: 18
2015: 40
2016: 87

It is impressive - clearly the ACA slowdown had no effect - not sure if they addressed this on the call

one minor nit

‘adjusted’ EPS here is pure horse hockey
you don’t wish away the stock based comp
for evidence, notice they did 36m in buybacks and yet the diluted count went up 1%. Bye 36m…

at $52, it trades at 70.3x TTM EA, or a 3 billion company making 44m trailing…

again, minor minor, but did they have to spend so much on the corporate HQ already? CFFO was 99m but they ate up almost half in CapEx…

Course, if they can keep doubling EA 70x won’t be too much to pay…

5 Likes

‘adjusted’ EPS here is pure horse hockey
you don’t wish away the stock based comp

Hi One Eye,

Maybe you didn’t notice but GAAP Net Income and EPS were up 109.3% too (to 74 cents), so Paycom isn’t just relying on adjusted earnings.

Saul

1 Like

Maybe you didn’t notice but GAAP Net Income and EPS were up 109.3% too (to 74 cents), so Paycom isn’t just relying on adjusted earnings.

Saul, thanks to you, I own a sliver of this one. So I’m keeping my one-eye on this one and understand the attraction.

It is just that stock based comp is a huge eye-sore - it was 23m last year and only 3m the year before which is pretty striking, and there could be a perfectly logical reason for it being so high, but scanning the last Q makes you feel like they are just shoving shares down people’s throats.

In the end, we can debate long and hard as to whether this even matters (and whether adjusted or not is right, whether CFFO is more appropriate than net income, whether EBITDA is accurate or not, etc.), but I’ve learned in my time to watch these sorts of things closely cause it is a tangible indicator about how management feels about its shareholder base. That’s all.

From the last Q

On July 8, 2015, we issued an aggregate of 741,931 restricted shares of common stock under the LTIP (“2015 Restricted Stock”) to each of our executive
officers and certain non-executive employees. On April 15, 2016, we issued an aggregate of 847,928 restricted shares of common stock under the LTIP to each of
our executive officers and certain non-executive employees, and on May 2, 2016, we issued an aggregate of 5,132 restricted shares of common stock under the
LTIP to certain members of our Board of Directors (“2016 Restricted Stock” and, collectively with all shares of 2015 Restricted Stock, the “Post-IPO Restricted
Stock”).

On October 4, 2016, we issued an aggregate of 721,100 restricted shares of common stock to our executive officers and certain non-executive, non-sales
employees under the LTIP, consisting of 510,550 shares subject to market-based vesting conditions (“Market-Based Shares”) and 210,550 shares subject to timebased
vesting conditions (“Time-Based Shares”).

This all adds up…

4 Likes

there could be a perfectly logical reason for it being so high,

They did expand their R&D department quite a bit this year, and hiring those guys, and getting them to move from Silicon Valley to Oklahoma, may require sweetening the pot. But that’s a total guess.

In the end, we can debate long and hard as to whether this even matters

It’s hard to complain about dilution when your earnings are growing over 100% annually (both Gaap and non-Gaap) in spite of any dilution.

Saul

4 Likes

It’s hard to complain about dilution when your earnings are growing over 100% annually (both Gaap and non-Gaap) in spite of any dilution.

which is why I visit this board from time to time :slight_smile:

I’m embarrassed to admit I didn’t even know about PAYC despite following ADP and PAYX - again, appreciate your willingness to share…

course, I’m still trying to figure our your cash flow numbers on LGIH by the way…

@-)

(one eye)

1 Like

Thinking more about it One Eye, don’t you think it’s a little ungrateful to the company to complain about SBC on a day when your stock is up 14%, and they just announced earnings up over 100%, recurring revenues which make up 98.3% of revenue, EBITDA up 97%, and all the rest. You’re complaining that there isn’t a second strawberry on top of your free banana-split!

2 Likes

Thinking more about it One Eye, don’t you think it’s a little ungrateful to the company to complain about SBC on a day when your stock is up 14%, and they just announced earnings up over 100%, recurring revenues which make up 98.3% of revenue, EBITDA up 97%, and all the rest. You’re complaining that there isn’t a second strawberry on top of your free banana-split!

Saul, this is your board and you are the head honcho.

But honestly, I don’t care one iota what a stock does when I own it (at least for a while - eventually I hope it goes up!) when doing an evaluation. Capital allocation is often the biggest issue there is with a successful investment, and time spent figuring out how management thinks is rarely wasted, though again I’m not as growth oriented as you are. Thing is, we can enjoy appreciation in a stock - if it doesn’t happen then this is all a waste of time - but my review is consistent in all cases (well, that’s the dream at least!). My evaluation isn’t going to change regardless of the stock, and if my evaluation produces successful results, I will just keep at it. There are plenty of times when good news is completely ignored so you don’t want Mr. Market to tell you whether results are good or bad by the stock price cause often times it will fake you out for a while.

Or, as Peter Lynch said:

Before buying a stock, I like to be able to give a two minute monologue that covers the reasons I’m interested in it, what has to happen for the company to succeed, and the pitfalls that stand in its path.

Course, all this said, I get your point…my tagline on Fool used to be ‘just make money’. So…just make money.

Ben Graham, the father of analytical investing, said that an investor should only “do those things as an analyst that you know you can do well, and only those things”.

5 Likes

Was there an ACA slow down in 2016? Since the new president took over in 2017, I would assume the slowdown didn’t commence prior to November 2016.

Was there an ACA slow down in 2016?

Which of these do you mean?
ACA American Chiropractic Association
ACA American Correctional Association
ACA American Camp Association
ACA Arms Control Association
ACA American Counseling Association
ACA American Camping Association
ACA American Canoe Association
ACA American Cable Association
ACA American Culture Association
ACA Amputee Coalition of America
ACA A Current Affair
ACA Australian Communications Authority
ACA Air Canada (ICAO code)
ACA American Cycling Association
ACA American Crystallographic Association
ACA Atheist Community of Austin
ACA Adult Children of Alcoholics
ACA Adventure Cycling Association (Missoula, Montana)
ACA Anti-Corruption Agency (Malaysia)
ACA Annual Catholic Appeal
ACA Association of Canadian Archivists
ACA Anterior Cerebral Artery
ACA Academic Cooperation Association (Belgium)
ACA Application Control Architecture (DEC)
ACA American Composers Alliance
ACA Alley Cat Allies
ACA Australian Consumers’ Association
ACA Automóvil Club Argentino
ACA Atlantic Coast Airlines
ACA American Collectors Association
ACA Army Contracting Agency
ACA Appalachian College Association
ACA Applications of Computer Algebra
ACA Australian Cricketers’ Association
ACA American Communication Association
ACA Asociación Cristiana (Christian Association, Guatemala)
ACA Association of Consulting Actuaries
ACA Australian Coal Association
ACA American Council on Alcoholism
ACA Anglican Church in America
ACA Australian Centre for Astrobiology
ACA Additional Central Assistance
ACA Acción Católica Argentina (Spanish)
ACA American Civic Association
ACA Anticardiolipin Antibody
ACA Agricultural Credit Association
ACA American Compensation Association
ACA Anisotropic Conductive Adhesive (fine-pitch chip-on-flex packages for LCD applications)
ACA Ammoniacal Copper Arsenate (wood preservative)
ACA Airspace Control Authority
ACA Academic Building
ACA Academy of Certified Archivists
ACA Aircraft Carrier Alliance
ACA Agriculture Council of America
ACA Air Care Alliance
ACA Amazon Conservation Association (Washington, DC)
ACA Avis de Changement d’Adresse (Canada Post)
ACA Association of Chartered Accountants
ACA Australian Counselling Association (Grange, QLD, Australia)
ACA Adult Children Anonymous
ACA American Cichlid Association
ACA Akita Club of America
ACA American Cryptogram Association
ACA American Country Award (music)
ACA Author Co-Citation Analysis
ACA Associate of the Institute of Chartered Accountants
ACA Allied Cash Advance
ACA Automóbil Club d’Andorra (Catalan: Automobile Club of Andorra)
ACA After Contract Award
ACA Alberta Construction Association
ACA Aluminum Company of America
ACA American Chain Association
ACA Asociación Campesina de Arauca (Spanish: Arauca Peasants Association; Arauca, Colombia)
ACA Airspace Coordination Area
ACA Association of Consulting Architects
ACA Alaska Conservation Alliance
ACA Application Continuity Appliance (Teneros)
ACA Agence Culturelle d’Alsace (French: Alsace Cultural Agency)
ACA Avanade Connected Architecture (Avanade Inc.)
ACA Association for Communication Administration
ACA Arizona Contractors Association
ACA Administrative Cost Allowance (student financial aid)
ACA Air Commando Association
ACA Adaptive Channel Allocation
ACA American Cadet Alliance
ACA Alabama Cattlemen’s Association
ACA Air Courier Association
ACA Associate Contractor Agreement
ACA Administrative Control Authority
ACA Agricultural Credit Act of 1987
ACA Aircrew Association (UK)
ACA Australian Coastal Atlas
ACA Awassa College of Agriculture (Ethiopia)
ACA Agency for Cultural Affairs (Japan; est. 1968)
ACA American Conservation Association
ACA American Cuemakers Association
ACA Association of Chinese Americans
ACA Austrian Consultants Association (Austria)
ACA Association for the Calligraphic Arts
ACA Astronomie Centre Ardenne (French astronomy club)
ACA Air Clearance Authority
ACA Acapulco, Guerrero, Mexico - Alvarez International (Airport Code)
ACA Automatic Circuit Assurance
ACA Asynchronous Communications Adapter
ACA Allegheny Cycling Association
ACA All Channel Alert (Canada)
ACA Architectural Cladding Association (UK)
ACA Antarctic Conservation Act
ACA Airlift Clearance Authority
ACA American Creativity Academy (Kuwait)
ACA Allan Crawford Associates (Canada)
ACA Association for Community Advocacy
ACA Allocation Chômeur Âgé
ACA Animal Charities of America
ACA Alzheimer’s of Central Alabama
ACA Astronautics Corporation of America
ACA American Canine Association, Inc.
ACA Average Case Analysis
ACA Advanced Combat Aircraft
ACA Association Canadienne d’Acoustique (Canadian Acoustical Association)
ACA Abduction Central Alert
ACA Athlétic Club Arles-Avignon (French football club)
ACA American Countertrade Association
ACA American Catahoula Association
ACA Australian Clogging Association
ACA Advanced Cargo Aircraft
ACA American Cheerleaders Association
ACA Access Control Agent
ACA Adjacent-Channel Attenuation
ACA Attitude Control Assembly
ACA American Coach Association
ACA Avoids Cascading Aborts
ACA Alberta Chess Association
ACA Adviser Compliance Associates, LLC
ACA Arizona Cultural Academy (Phoenix, AZ)
ACA Alliance of Cambridge Advisors
ACA Archbishop’s Catholic Appeal
ACA Alerting Communicators of America
ACA Alternate Command Authority
ACA Arizona Counselors Association
ACA Absolute Calibration Audit
ACA Adaptive Component Architecture
ACA Animal Care Attendant (veterinary)
ACA Associate of the Conference of Consulting Actuaries
ACA Agri Coll Association (French agricultural toy association)
ACA Amphibian Conservation Alliance
ACA American Chess Association
ACA Arts and Cultural Alliance
ACA American Craft Association
ACA Action Culturelle et Artistique (French: Artistic and Cultural Action; University of Paris VIII; France)
ACA A36-A350 Corridor Alliance
ACA Automobile Club d’Aix (French automobile club)
ACA Artisan Contractors Association of America
ACA Aero Club Albatross (Delaware, NJ)
ACA Academy for Culinary Arts
ACA Air Control Authority
ACA Applied Combinatorial Analysis
ACA Asynchronous Criticality Avoidance
ACA Allo Casse Auto (French automobile parts company)
ACA Adaptive Configuration Agent
ACA Australian Croquet Association Inc
ACA Aéro-Club d’Abidjan (French; flying club; Ivory Coast)
ACA Ambo College of Agriculture (Ethiopia)
ACA American Carbohydrate Association
ACA Asociación Casa Alianza (Marriage Alliance Association, Guatemala)
ACA Assignment Control Authority
ACA Anniston Chemical Activity (Anniston, Alabama)
ACA Advertising Council of America
ACA All Composite Aircraft
ACA Acquisition Capability Assessment
ACA Autonomous Cooperating Agent
ACA Application Control Account
ACA Auditeurs et Consultants Africains (French: African Auditors and Consultants)
ACA American Cuesports Alliance
ACA Automatic Circuit Analyzer
ACA Automatic Conference Arranger
ACA Asynchronous Cooperative Algorithm
ACA Average Coherence Approximation
ACA American Cheerleading Academy
ACA Aquadev Central Africa
ACA Aviation Club d’Avord (French poker club)
ACA Alpine Côte d’Azur (French automobile club)
ACA Agricultural Credits Act of 1928
ACA Amusement Corporation of America (carnivals and fairs)
ACA Automated Circuit Assurance
ACA Analysis of Collection Activity
ACA Airborne Collection Assembly
ACA Active Circulator Antenna
ACA Autobody Craftsmans Association
ACA Advanced Confidentiality Agreement
ACA Autoclub Altena (Dutch; Belgian car club)
ACA All Call Answered (Sprint)
ACA Automatic Conference Arrangement
ACA Auto-Configuration Agent
ACA Advisory Committee on Aero-ballistics
ACA Adaptive Computing Architecture
ACA Automatic Contrast Adjustment
ACA Advanced Commercial Airliner
ACA Advanced Contract Administrator
ACA Association Chalonnaise d’Aquariophilie (French; aquarium enthusiasts’ association)
ACA Agent of the Certifying Authority (performs certification testing of systems)
ACA Australian Citizenship Act
ACA American Contemporary Art
ACA Adobe Certified Associate
ACA American Citizens Abroad (various locations)
ACA Angel Capital Association (trade association)
ACA Atlantic Center for the Arts (New Smyrna Beach, FL)
ACA Advisory Commission on Aging (Alameda, CA)
ACA Armed Criminal Action
ACA Affordable Care Act of 2010

Must be that last one. What do you mean by a “slow down”?

6 Likes

From what I have read, this year’s slowdown came in large part because they stopped advertising and the late signups skew toward the young and well … thereby screwing the pool.

Did you overlook the Arkansas and Alabama Coroner’s Associations ?

2 Likes