Price to Sales (P/S)
since 2014
Calculation
Paycom Software Inc., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Revenues1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 16, 2023 | 12.94 | = | 307.45 | ÷ | 23.76 | 23.76 | = | 1,375,218 | ÷ | 57,871,962 | |
| Feb 17, 2022 | 18.01 | = | 327.72 | ÷ | 18.19 | 18.19 | = | 1,055,524 | ÷ | 58,014,548 | |
| Feb 18, 2021 | 27.55 | = | 401.55 | ÷ | 14.57 | 14.57 | = | 841,434 | ÷ | 57,739,986 | |
| Feb 13, 2020 | 23.71 | = | 303.29 | ÷ | 12.79 | 12.79 | = | 737,671 | ÷ | 57,661,188 | |
| Feb 14, 2019 | 18.04 | = | 178.38 | ÷ | 9.89 | 9.89 | = | 566,336 | ÷ | 57,276,992 | |
| Feb 14, 2018 | 12.29 | = | 92.08 | ÷ | 7.49 | 7.49 | = | 433,047 | ÷ | 57,801,299 | |
| Feb 21, 2017 | 9.25 | = | 53.11 | ÷ | 5.74 | 5.74 | = | 329,141 | ÷ | 57,346,334 | |
| Feb 22, 2016 | 7.44 | = | 29.27 | ÷ | 3.93 | 3.93 | = | 224,653 | ÷ | 57,135,187 | |
| Feb 26, 2015 | 11.72 | = | 32.84 | ÷ | 2.80 | 2.80 | = | 150,929 | ÷ | 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 data reveals a period of significant valuation expansion followed by a contraction, occurring against a backdrop of consistent and linear revenue growth. While sales per share increased steadily throughout the analyzed period, the share price experienced more pronounced fluctuations, resulting in a peak and subsequent decline in the price-to-sales (P/S) multiple.
- Revenue Growth Trajectory
- Sales per share demonstrated uninterrupted year-over-year growth, rising from 2.80 US$ in 2015 to 23.76 US$ by February 2023. This consistent upward trend indicates a sustained increase in the company's capacity to generate revenue on a per-share basis.
- Share Price Performance
- The share price exhibited a strong growth trend between 2015 and 2021, climbing from 32.84 US$ to a peak of 401.55 US$. Following this peak, a downward correction occurred, with the price retreating to 307.45 US$ by the end of the observed period.
- Price-to-Sales (P/S) Ratio Dynamics
- The P/S ratio reflects a distinct cycle of valuation expansion and contraction. After an initial dip to 7.44 in 2016, the ratio expanded aggressively, peaking at 27.55 in 2021. This peak indicates a period where share price appreciation significantly outpaced revenue growth. Subsequently, the ratio contracted to 12.94 by February 2023, returning to levels comparable to those observed in 2018, suggesting a normalization of the valuation multiple despite continued sales growth.
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Comparison to Industry (Industrials)
Paycom Software Inc., P/S, long-term trends, comparison to industry (industrials)
| Paycom Software Inc. | Industrials | |
|---|---|---|
| Feb 16, 2023 | 12.94 | 1.80 |
| Feb 17, 2022 | 18.01 | 2.07 |
| Feb 18, 2021 | 27.55 | 2.14 |
| Feb 13, 2020 | 23.71 | 1.77 |
| Feb 14, 2019 | 18.04 | 1.58 |
| Feb 14, 2018 | 12.29 | 1.71 |
| Feb 21, 2017 | 9.25 | 1.68 |
| Feb 22, 2016 | 7.44 | 1.48 |
| Feb 26, 2015 | 11.72 | 1.65 |
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).