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PAYC

9/9 Score

Paycom Software, Inc.

Analysis Date: February 20, 2026

Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. It offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution provides a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, labor management reports/push reporting, and geofencing/geotracking, and Microfence, a proprietary Bluetooth. Its HCM solution also offers payroll applications comprising better employee transaction interface, payroll and tax management, Paycom pay, expense management, mileage tracker/fixed and variable rates, garnishment management, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, and Paycom learning and content subscriptions, as well as my analytics, which offer employment predictor reporting. In addition, its HCM solution provides manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration/benefits to carrier; COBRA administration; personnel action and performance discussion forms; surveys; and affordable care act applications, as well as Clue, which securely collect, track, and manage the vaccination and testing data of the workforce. Paycom Software, Inc. was founded in 1998 and is headquartered in Oklahoma City, Oklahoma.

Buffettology Criteria

All 9 of 9 criteria passed

  • High ROE

    Return on Equity > 12%

    Value: 26.1%

  • High ROIC

    Return on Invested Capital > 9%

    Value: 18.4%

  • Cash Machine

    FCF / Assets > 5%

    Value: 5.4%

  • Fair Valuation

    Earnings Yield > 3.5%

    Value: 7.2%

  • Share Buybacks

    Share Count is Dropping

    Value: -0.7%

  • Defensible Moat

    Gross Profit Margin > 40%

    Value: 80.8%

  • Simple Business

    Not in a speculative sector (e.g., Biotech)

    Value: Technology

  • Conservative Debt

    Debt to Equity < 1.5

    Value: 0.09x

  • Consistent Growth

    5-Year Growth is Positive

    Value: 226.4%

Analysis Summary

This enterprise demonstrates impressive returns on capital, a sign of a business capable of compounding value over time. The company's pricing power, indicated by its strong moat score, and its lean balance sheet suggest a robust operation that can likely weather economic storms. While revenue growth isn't blistering, the overall picture paints a compelling portrait of a quality business.

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