PaychexFRA:PCX -0.02%82 Gross Margin % is 74.01% as of May. 2026, which is 5% above its 10-year median of 70.72. GuruFocus rates FRA:PCX with a GF Score™ of 82/100 and a GF Value™ of €136.39 (Significantly Undervalued). The stock has 4 warning signs investors should review. Among 2,685 Software companies, Paychex ranks better than 83.95% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. Paychex's Gross Profit for the
three
months ended in May. 2026 was €1,017 Mil. Paychex's Revenue for the
three
months ended in May. 2026 was €1,374 Mil. Therefore, Paychex's Gross Margin % for the quarter that ended in May. 2026 was 74.01%.
The historical rank and industry rank for Paychex's Gross Margin % or its related term are showing as below:
FRA:PCX'
s Gross Margin % Range Over the Past 10 Years
Min: 68.3 Med: 70.72 Max: 74.29
Current: 74.29
During the past 13 years, the highestGross Margin % of Paychex was 74.29%. The lowest was 68.30%. And the median was 70.72%.
FRA:PCX's Gross Margin % is ranked better than 83.95% of 2685
companies
in the Software industry
Industry Median: 40.45
vs FRA:PCX: 74.29
Paychex had a gross margin of 74.01% for the quarter that ended in May. 2026 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Paychex was 1.40% per year.
Paychex (FRA:PCX) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Paychex had a gross margin of 74.01% for the quarter that ended in May. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Paychex Gross Margin % Related Terms
Paychex Gross Margin % Historical Data
* Premium members only.
The historical data trend for Paychex's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:PCX vs WDAY, ROP, ZM: Gross Margin % Comparison
For the Software - Application subindustry, Paychex's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Paychex Gross Margin % vs Software Industry
For the Software industry and Technology sector, Paychex's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Paychex's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Paychex (FRA:PCX) has a Gross Margin % of 74.01% as of May. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Paychex and its competitors. This is near median its historical median of 70.72. Over the past decade, Paychex's Gross Margin % has ranged from 68.30 to 74.29. According to the industry distribution chart, Paychex ranks #431 out of 2685 companies in the Software industry, placing it in the top 16.1%.
Is Paychex's Gross Margin % too high?
Paychex's current Gross Margin % of 74.01% is near median its 10-year median of 70.72. Over the past 10 years, this metric has ranged from a low of 68.30 to a high of 74.29. The Software industry median Gross Margin % is 40.45. Paychex's value of 74.01% is 83% above this industry median. Based on the distribution chart, Paychex ranks #431 out of 2685 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Paychex has a GF Score™ of 82/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Paychex's Gross Margin % compare to WDAY and ROP?
According to the Software industry distribution chart, Paychex ranks #431 out of 2685 companies for Gross Margin %. This places Paychex in the top 16% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 40.45. Paychex's value of 74.01% is 83% above this benchmark. Historically, Paychex's own Gross Margin % has ranged from 68.30 to 74.29 over the past decade. While the company's 10-year median is 70.72 vs. the industry median of 40.45, Paychex has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,685 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Paychex's current Gross Margin % of 74.01% is 83% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Paychex and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Paychex's current Gross Margin % is 74.01%, which is near median its own 10-year median of 70.72. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Paychex stock overvalued right now?
Based on GuruFocus' analysis, Paychex (FRA:PCX) is currently considered Significantly Undervalued. The stock's GF Value™ is €136.39, compared to a current price of €84.39 — trading 38.1% below its estimated fair value. The current Gross Margin % is 74.01%, which is near median its 10-year median of 70.72 and 83% above the Software industry median of 40.45. Paychex's overall GF Score™ is 82/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Paychex (FRA:PCX), the current Gross Margin % is 74.01% as of May. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Paychex (FRA:PCX) Overvalued in 2026?
Based on GuruFocus' analysis, Paychex stock appears to be undervalued.
The current stock price of €84.39 is trading 38.1% below its estimated GF Value™ of €136.39.
GuruFocus considers Paychex to be Significantly Undervalued.
Key valuation signals for FRA:PCX:
Gross Margin %: 74.01% (near median its 10-year median of 70.72)
GF Value™: €136.39 vs. price of €84.39 (38.1% below fair value)
Industry Position: 83% above the Software median (#431 of 2685)
No single metric tells the full story. See the FRA:PCX stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Paychex is a cloud-based human capital management provider offering payroll, compliance, talent management, benefits administration, and retirement services. The firm also provides HR outsourcing services, including professional employer organization, or PEO, offerings, enabling clients to reduce HR overhead. Paychex primarily targets small and midsize businesses, although its acquisition of Paycor in 2025 signals the firm's aspirations to expand into the midmarket segment, serving firms with more than 100 employees. As of fiscal 2025, Paychex has approximately 800,000 clients and manages payroll for one in 11 workers in the United States.
82GF Score
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