PAYX
Paychex
Dividend / Cash flow
★ Quality 66/100Price today
$111.77
what the market pays
Worth
$71.23
calculated cycle value
Price is 57% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Established business paying dividends
$80.40
per share
How it's calculated
Paychex — assistant high-side (2026-06-07). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Dividend / Cash flow · vs 42 peers
You pay 25.6x times this business's cash flow; its sector median is 25.8x.
34% above what Charlie thinks it's worth (17x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $4.72/share × 17.0x multiplier minus $9.17 in negative net cash = $71.23 in intrinsic value. Today's price of $111.77 is 36% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 57% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $67.67.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$56.98
-20% off Value
🟡 Discounted
≤$67.67
-5% off Value
🔴 Today
$111.77
-36% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Paychex handles payroll for the small business that would rather not think about it.
Paychex manages payroll, human resources, and benefits for small and mid-sized businesses in the U.S. It charges recurring subscriptions and a fee per employee processed, plus the interest it earns on the payroll money it holds between collecting and paying it out. Revenue of $6.5B with a 74% gross margin.
The cost of switching payroll providers is high: nobody risks paying their employees or the taxman wrong just to save a few dollars. Thousands of small, sticky clients, each paying little but staying for years. Not an impregnable moat, but a calm and repeatable one.
Revenue history
From $4.9B to $6.5B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $6.5B · FY2026
Of every $100 in sales, $73 goes to costs and operations; $27 is left as net profit (27% margin).
Catalysts and risks
Paycor integration: lifts revenue to $6.5B in FY2026 and opens cross-selling.
High interest rates fatten what it earns on held payroll funds.
8% annual growth in a fragmented SMB market.
$4.6B in debt against $1.1B in cash after buying Paycor.
Less SMB employment reduces payrolls processed and per-employee fees.
Rate cuts shrink the 'free' income on held funds.
Charlie's note
“A boring and profitable business, just the way I like them. Paying 17x for a compounder that grows 8% with 74% margins isn't a steal, but it isn't a gift either — the quality is already in the price.”
Analysis · July 2026
So when would be a good price for Paychex?
By our calculation, not yet. We will email you the day it drops to $67.67 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.