After a brief dip and some nervousness about the outlook for Paychex (NASDAQ:PAYX), shares are heading back toward $37 a stub. I must admit I was a bit excited to see the dip this morning, because I saw no problem with the company's results and I think that Paychex around $30 a share is an intriguing investment opportunity.

For its first quarter, the payroll and human resources service provider delivered total revenue growth of 14%, with 9% growth in payroll services, 21% in human resources, and 55% growth on the funds that Paychex holds for clients (float). With expenses up an almost equal 13%, operating income also increased by 14% and diluted earnings per share increased almost 17% to $0.35 a share from last year's $0.30 a share. Balance sheet details and some additional information on margin can be found in our Fool by Numbers published earlier today.

That's the big picture, but different parts of the business at Paychex are at very different levels of maturity. The payroll business, which competes with Automatic Data Processing (NYSE:ADP), is fairly mature and I think expectations of 6% to 10% growth are reasonable. But the human resources services business, which to a certain degree competes with companies such as Administaff (NYSE:ASF) and Gevity HR (NASDAQ:GVHR), is fairly young and in a relatively strong economy has been growing at rates of 20% or more. I'm pretty certain that a slowing or soft economy for small and medium-sized businesses will slow this unit's growth a great deal, but in the next five to 10 years the overall growth in HR services should exceed payroll services by a hefty margin. None of this is rocket science, but making the distinction between the different parts of the business is important when it comes to valuing the business and making assumptions about growth in free cash flow.

Paychex believes it will achieve the fiscal 2007 results it laid out for investors last quarter, and I have no reason to doubt the company on this point. Looking out to fiscal 2008 and 2009, the exact picture isn't clear. If interest rates begin to head back down, that will hurt the company's investment income, and it likely means the economy is slowing, which also doesn't bode well for Paychex. However, a longer three-, five-, or 10-year horizon still looks good for this company, and it's this time horizon that matters most.

The question becomes what kind of growth is priced into the company's shares for the next five to 10 years and if that growth is achievable. By my estimates, at $37 a share, about 9% to 10% growth is priced into the shares for 10 years, but at $30 a share there is only about 5% to 6% growth priced in. If an opportunity below $30 presents itself in the next six months, it is something I would strongly consider and something I think other investors should consider as well.

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At the time of publication Nathan Parmelee had no financial interest in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.