Price to Earnings (P/E)
since 2014
Calculation
Paycom Software Inc., P/E, long-term trends, calculation
| P/E | = | Share price1, 2, 3 | ÷ | Earnings per share1 (EPS) | EPS1 | = | Net income1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 16, 2023 | 63.23 | = | 307.45 | ÷ | 4.86 | 4.86 | = | 281,389 | ÷ | 57,871,962 | |
| Feb 17, 2022 | 97.02 | = | 327.72 | ÷ | 3.38 | 3.38 | = | 195,960 | ÷ | 58,014,548 | |
| Feb 18, 2021 | 161.62 | = | 401.55 | ÷ | 2.48 | 2.48 | = | 143,453 | ÷ | 57,739,986 | |
| Feb 13, 2020 | 96.85 | = | 303.29 | ÷ | 3.13 | 3.13 | = | 180,576 | ÷ | 57,661,188 | |
| Feb 14, 2019 | 74.54 | = | 178.38 | ÷ | 2.39 | 2.39 | = | 137,065 | ÷ | 57,276,992 | |
| Feb 14, 2018 | 79.67 | = | 92.08 | ÷ | 1.16 | 1.16 | = | 66,807 | ÷ | 57,801,299 | |
| Feb 21, 2017 | 69.47 | = | 53.11 | ÷ | 0.76 | 0.76 | = | 43,840 | ÷ | 57,346,334 | |
| Feb 22, 2016 | 79.84 | = | 29.27 | ÷ | 0.37 | 0.37 | = | 20,945 | ÷ | 57,135,187 | |
| Feb 26, 2015 | 312.27 | = | 32.84 | ÷ | 0.11 | 0.11 | = | 5,663 | ÷ | 53,848,094 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Paycom Software Inc. Annual Report.
The financial trajectory between February 2015 and February 2023 is characterized by substantial growth in earnings and share price, accompanied by a significant long-term contraction in the valuation multiple.
- Share Price Performance
- A strong upward trend is evident from 2015 to 2021, with the share price rising from 32.84 US$ to a peak of 401.55 US$. Following this peak, a moderate correction occurred, with the price settling at 307.45 US$ by February 2023.
- Earnings Per Share (EPS) Growth
- Earnings demonstrated a consistent and aggressive growth pattern, increasing from 0.11 US$ in 2015 to 4.86 US$ in 2023. A temporary decline in EPS was observed in February 2021, where earnings dropped to 2.48 US$ from the previous year's 3.13 US$, before resuming a strong recovery trend.
- Price-to-Earnings (P/E) Ratio Dynamics
- The P/E ratio exhibited high volatility, beginning at an exceptional 312.27 in 2015, indicating high market expectations for future growth. The ratio stabilized between 69.47 and 96.85 from 2016 through 2020. A significant spike to 161.62 occurred in 2021, driven by the combination of a peak share price and a simultaneous dip in EPS. By 2023, the P/E ratio compressed to 63.23, the lowest level in the analyzed period, suggesting a valuation that has become more aligned with actual earnings performance.
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Comparison to Industry (Industrials)
Paycom Software Inc., P/E, long-term trends, comparison to industry (industrials)
| Paycom Software Inc. | Industrials | |
|---|---|---|
| Feb 16, 2023 | 63.23 | 36.06 |
| Feb 17, 2022 | 97.02 | 35.59 |
| Feb 18, 2021 | 161.62 | — |
| Feb 13, 2020 | 96.85 | 43.95 |
| Feb 14, 2019 | 74.54 | 33.70 |
| Feb 14, 2018 | 79.67 | 29.83 |
| Feb 21, 2017 | 69.47 | 22.92 |
| Feb 22, 2016 | 79.84 | 22.89 |
| Feb 26, 2015 | 312.27 | 18.79 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).