Paychex (PAYX) Beats EPS Estimates, But Slow Growth Weighs on Shares
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Paychex, Inc. (NASDAQ:PAYX) fell despite reporting impressive fiscal 2027 Q1 results on September 23. For the quarter ended August 31, 2026, total revenue increased 6% year-over-year to $1.6 billion, while operating income rose 14% to $619.2 million. The increase in operating income was mainly driven by higher revenue and lower acquisition-related costs. Adjusted operating income rose 9% to $684.7 million, while adjusted diluted earnings per share increased 10% to $1.34. This came in ahead of the market expectation of $1.32. The company also raised parts of its fiscal 2027 outlook, increasing its expected PEO and Insurance Solutions revenue growth to 7% to 8% from its previous forecast of 6% to 7%. Paychex, Inc. (NASDAQ:PAYX) also lifted its outlook for interest on funds held for clients due to higher average interest rates. READ ALSO: Jim Cramer Provides the "Bear Case" for Paychex, Inc. (PAYX) and Kraft Heinz's Bull Case Runs Into Its Own Recent Reversal. Slower Overall Growth Remains a Concern Despite the solid quarterly results and higher guidance for some parts of its business, the company maintained its full-year total revenue growth outlook at 5% to 6%. This is well below the 17% revenue growth reported in fiscal 2026, although that comparison is distorted by the Paycor acquisition, which contributed roughly 12 percentage points to fiscal 2026 revenue growth. The...
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