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Is this Large Market Cap Stock target price reasonable for Paychex, Inc. (NASDAQ:PAYX)?

The company in question is, Paychex, Inc. (NASDAQ:PAYX) currently with a stock price of 56.2 (-0.07% today). The market cap for Paychex, Inc. is 20339.34, and is in the sector Services, and Staffing & Outsourcing Services industry. The target price for Paychex, Inc. is 55. Currently Paychex, Inc. is trading with a P/E of 26.66, and a forward P/E of 23.44. Average volume for Paychex, Inc. is 1822.58 and so far today it is 1071300.

Performance in the last year for Paychex, Inc. has been 16.45%. For EPS growth, Paychex, Inc. has seen a growth of 12.80%, and is looking to grow in the next year to 7.97%. More long term stats show that EPS growth has been 8.00% over the last five years and could be 9.60% for the next five years. Paychex, Inc. has seen sales growth quarter over quarter at 8.60%, with EPS growth quarter over quarter at 3.60%. The 20-day simple moving average is -5.04%, with the 200-day simple moving average coming to 3.57%.

Since the IPO date for Paychex, Inc. on the 3/26/1990, Paychex, Inc. has seen performance year to date to be 8.92%. With Paychex, Inc. trading at 56.2, the dividend yield is 3.27%, and the EPS is 2.11.

So could Paychex, Inc., be undervalued? Well as said before P/E is 26.66. The PEG is 2.78, P/S is 6.75 and the P/B is at 10.2. The P/cash is 40.87, with P/free cash flow at 64.18.

Paychex, Inc. ability to deal with debt shows that the current ratio is 1.2, and the quick ratio is 1.2. This is with long term debt/equity at 0, and total debt/equity at 0.03.

In terms of margins, Paychex, Inc. has a gross margin of 70.90%, an operating margin of 38.90% and a profit margin of 25.40%.Payout ratio for Paychex, Inc. is 81.10%. Return on assets come to 11.90% with return on investment coming to 39.40%.

Insider ownership for Paychex, Inc., is at 10.60% and institutional ownership comes to 71.50%. Outstanding shares are at 361.91. While shares float is 322.28. The float short is currently 5.74%, and short ratio is 10.14.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

About the author

Mark Hines

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