Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Paycom Software Inc., FCFE calculation
US$ in thousands
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).
- Net cash provided by operating activities
- The net cash from operating activities demonstrated a consistent upward trend over the analyzed periods. Starting at $184,817 thousand in 2018, it increased steadily each year, reaching $224,263 thousand in 2019 and $227,207 thousand in 2020. The growth accelerated in the subsequent years, with cash provided by operations rising to $319,362 thousand in 2021 and further to $365,103 thousand in 2022. This progression indicates improving operational efficiency and stronger cash-generating capabilities.
- Free cash flow to equity (FCFE)
- Free cash flow to equity also exhibited a continuous increase across the period under review. Beginning at $123,965 thousand in 2018, FCFE increased modestly to $129,538 thousand in 2019 and $131,330 thousand in 2020. A more pronounced growth occurred in 2021 and 2022, with FCFE reaching $191,395 thousand and $221,582 thousand respectively. The pattern suggests enhanced availability of cash for equity shareholders, likely supported by operational improvements and efficient capital expenditures.
- Overall observations
- Both cash flow metrics show strong and steady improvements, with sharper increases in the last two reported years. The acceleration in operating cash flow and FCFE implies positive operational momentum and effective capital management. These trends could reflect successful business strategies and growing financial strength, thereby potentially increasing shareholder value.
Price to FCFE Ratio, Current
Paycom Software Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 57,700,820 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 221,582) |
| FCFE per share | 3.84 |
| Current share price (P) | 162.66 |
| Valuation Ratio | |
| P/FCFE | 42.36 |
| Benchmarks | |
| P/FCFE, Industry | |
| Industrials | 35.30 |
Based on: 10-K (reporting date: 2022-12-31).
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Paycom Software Inc., historical P/FCFE calculation, comparison to benchmarks
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).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 221,582,000 ÷ 57,871,962 = 3.83
4 Closing price as at the filing date of Paycom Software Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 307.45 ÷ 3.83 = 80.30
- Share Price
- The share price experienced a significant upward trend from 2018 through 2020, rising from $178.38 to a peak of $401.55. This was followed by a decline in 2021 to $327.72, and a further decrease in 2022 to $307.45, indicating some volatility and a contraction from the 2020 high.
- Free Cash Flow to Equity (FCFE) per Share
- FCFE per share demonstrated a steady increase across the five-year period. Starting at $2.16 in 2018, it rose marginally to $2.25 in 2019 and $2.27 in 2020. The growth rate accelerated subsequently, reaching $3.30 in 2021 and $3.83 in 2022, which suggests improving cash-generating capacity attributable to equity holders.
- Price to Free Cash Flow to Equity (P/FCFE) Ratio
- The P/FCFE ratio showed considerable fluctuation over the years. It escalated from 82.42 in 2018 to a high of 176.54 in 2020, reflecting a substantial premium placed on the company's cash flow prospects during this period. Thereafter, the ratio declined sharply to 99.34 in 2021 and further to 80.30 in 2022, aligning closer to the 2018 level. This reduction may indicate a market reassessment of valuation multiples or a normalization following prior expansion.
- Overall Insights
- The data reveals that while the company’s capacity to generate free cash flow per share has consistently strengthened, culminating in a near doubling from 2018 to 2022, the market valuation measured by share price and P/FCFE ratio experienced more volatility. The peak in share price and valuation ratio in 2020 suggests heightened investor optimism that moderated in subsequent years. The decline in valuation multiples alongside rising FCFE per share in 2021 and 2022 suggests a potential undervaluation or a strategic market correction rather than deterioration in fundamental cash flow generation.