JP Morgan Raises Paycom Software PT to $235, Maintains Neutral Rating

JP Morgan Raises Paycom Software PT to $235, Maintains Neutral Rating

In a recent analyst update, JP Morgan has raised its price target for Paycom Software to $235, while maintaining a neutral rating. The move comes amidst Paycom's robust financial performance and increasing demand for its AI-enhanced human capital management (HCM) software [1].

Paycom, a leading provider of cloud-based HCM software, has seen a significant boost in revenue and profit forecasts for fiscal 2025. The company now expects revenue between $2.05 billion and $2.06 billion, up from its previous projection of $2.02 billion to $2.04 billion [1]. This growth is largely attributed to the integration of AI features into its employee management services, which have enhanced the appeal of Paycom's offerings to businesses seeking to streamline workforce management functions.

The company's Q2 2025 results demonstrated strong growth, with revenue reaching $483.6 million, adjusted core profit rising to $198.3 million, and non-GAAP earnings per share (EPS) hitting $2.06, significantly exceeding analyst estimates [1]. Paycom's recurring revenue remained strong at 94.1% of total sales, underscoring the company's successful subscription-based model and customer retention.

JP Morgan's analysts cited Paycom's focus on product innovation and market expansion as key drivers behind the price target increase. The company's introduction of IWant, a command-driven AI tool, and its regulatory approval as a payment institution from the Central Bank of Ireland to serve European operations for multinational clients are notable developments [1].

However, Paycom faces potential challenges, including a weakening U.S. labor market and increased spending on research and development and non-cash stock-based compensation. Despite these factors, JP Morgan remains optimistic about Paycom's AI-driven strategy and its competitive position in the HCM software market.

References:
[1] https://theoutpost.ai/news-story/paycom-raises-2025-forecasts-as-ai-integration-boosts-demand-for-hr-software-18796/