Shares of Paychex Inc., which provides payroll and human-resources services, declined on Thursday after fiscal third-quarter sales rose, but failed to meet expectations.
Paychex posted a nearly 10 percent rise in sales to $532.2 million, just missing the $533.3 million expected by analysts. Profit rose 13 percent to meet estimates.
Baird analyst Mark Marcon, who has an "Outperform" rating on the stock, attributed slowing sales growth to a deteriorating economy.
"Management clearly noted that they are starting to see more signs of a slowing economy than they have in recent quarters, which had a slight negative impact on the fiscal third-quarter selling season," Marcon wrote in a client note.
But Marcon said 10 percent sales growth is "quite solid," given the softening U.S. economy.
Marcon also likes long-term growth prospects, saying that the outsourced payroll market is "still underpenetrated."
Shares slipped 34 cents to $32.54 in morning trading.
Terms & Conditions
RSS Headlines
Fool UK