Paychex, in the Spotlight Soon

Seth Jayson, The Motley Fool
Updated

Paychex (NAS: PAYX) is expected to report Q3 earnings around March 27. Here's what Wall Street wants to see:

The 10-second takeaway
 Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Paychex's revenues will grow 4.1% and EPS will increase 5.4%.

The average estimate for revenue is $592.6 million. On the bottom line, the average EPS estimate is $0.39.


Revenue details
 Last quarter, Paychex reported revenue of $569.4 million. GAAP reported sales were 4.3% higher than the prior-year quarter's $545.7 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 Last quarter, EPS came in at $0.41. GAAP EPS of $0.41 for Q2 were 5.1% higher than the prior-year quarter's $0.39 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
 For the preceding quarter, gross margin was 71.1%, 90 basis points better than the prior-year quarter. Operating margin was 40.4%, 50 basis points better than the prior-year quarter. Net margin was 26.0%, 30 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $2.33 billion. The average EPS estimate is $1.60.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,472 members out of 1,545 rating the stock outperform, and 73 members rating it underperform. Among 565 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 554 give Paychex a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Paychex is hold, with an average price target of $33.06.

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The article Paychex, in the Spotlight Soon originally appeared on Fool.com.

Seth Jayson owned shares of the following at the time of publication: Paychex. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Paychex. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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