What happened

Shares of Paycom Software (NYSE:PAYC) rose 29.2% in April 2020, according to data from S&P Global Market Intelligence. Shares of the company, which provides cloud-based software and services for payroll and human resources management, mostly moved in sync with a generally bullish market until April 28, when it reported strong first-quarter results. Paycom's stock surged more than 14% that day.

So what

In the first quarter, Paycom revenues rose 21% year over year to $242 million, while earnings jumped 12% to $1.33 per share. The analysts' consensus had forecast earnings near $1.27 per share on revenues near $239 million.

Close-up photo of a laptop keyboard where the right Shift key carries the word PAYROLL in all capitals.

Image source: Getty Images.

Now what

CEO Chad Richison sees the COVID-19 crisis as an opportunity to gain market share.

"Even though the month of March was impacted by declining revenues from our current client base due to the effects of COVID-19, we continue to see strong addition of new clients," Richison said in Paycom's first-quarter earnings call. "The pandemic is exposing seams created by the disparate systems and that is creating a higher demand for the Paycom single database solution."

This stock is now up 3% in 2020 and up 31% over the last 52 weeks, leaving the broader market far behind in both cases. Paycom's shares don't look cheap at 81 times trailing earnings and 26 times book value, but the company has earned these nosebleed valuation ratios by posting fantastic top-line growth and solid cash flows for many years.

PAYC Revenue (TTM) Chart

PAYC Revenue (TTM) data by YCharts