The 10-second takeaway
For the quarter ended May 31 (Q4), Paychex met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share increased.
Gross margins expanded, operating margins grew, net margins dropped.
Paychex reported revenue of $551.5 million. The 20 analysts polled by S&P Capital IQ expected to see revenue of $558.1 million on the same basis. GAAP reported sales were 5.5% higher than the prior-year quarter's $522.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.34. The 24 earnings estimates compiled by S&P Capital IQ anticipated $0.34 per share. GAAP EPS of $0.34 for Q4 were 3.0% higher than the prior-year quarter's $0.33 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 68.9%, 100 basis points better than the prior-year quarter. Operating margin was 35.5%, 50 basis points better than the prior-year quarter. Net margin was 22.4%, 30 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $594.4 million. On the bottom line, the average EPS estimate is $0.42.
Next year's average estimate for revenue is $2.38 billion. The average EPS estimate is $1.63.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,482 members out of 1,555 rating the stock outperform, and 73 members rating it underperform. Among 530 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 516 give Paychex a green thumbs-up, and 14 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 $32.39.
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