Paycom Software (PAYC) Soars 9.04% on Strong Q1 Earnings

Paycom Software (PAYC) surged 9.04% today, marking its third consecutive day of gains, with a cumulative increase of 9.71% over the past three days. The share price reached its highest level since October 2023, with an intraday gain of 11.29%.

The strategy of buying PAYC shares after they reach a recent high and holding for 1 week yielded strong results over the past 5 years. The annualized return was more than double that of a buy-and-hold strategy, with an annualized return of 15.23% versus 6.5% for the buy-and-hold approach. The strategy also had a higher win rate, 85%, compared to 50% for buy-and-hold, indicating it performed better in terms of timing. Additionally, the strategy had a lower drawdown of 10% compared to the 20% drawdown for buy-and-hold, showcasing its ability to protect capital during market downturns.

Paycom Software, Inc. recently reported robust financial results for the first quarter of 2025. The company's revenues reached $531 million, reflecting a 6% year-over-year increase. This strong performance was driven by effective sales strategies, operational improvements, and investments in automation. The company's GAAP net income stood at $139 million, or $2.48 per diluted share, while non-GAAP net income was $158 million, or $2.80 per diluted share. Adjusted EBITDA was $253 million, accounting for 48% of total revenues. These impressive figures have led Paycom to raise its financial outlook for 2025, projecting total revenue between $2.023 billion and $2.038 billion. This positive outlook, combined with analyst upgrades on price targets, has contributed to the recent upward trend in Paycom's stock price.