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Paycom Software has the Financial Strength Rank of 5.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Paycom Software's Interest Coverage for the quarter that ended in Jun. 2026 was 16.05.
Paycom Software's debt to revenue ratio for the quarter that ended in Jun. 2026 was 0.46.
As of today, Paycom Software's Altman Z-Score is 2.86.
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Paycom Software has the Financial Strength Rank of 5.
Paycom Software Financial Strength Related Terms
PAYC vs ESTC, BSY, PCOR: Financial Strength Comparison
For the Software - Application subindustry, Paycom Software's Financial Strength, along with its competitors' market caps and Financial Strength 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.
Paycom Software Financial Strength vs Software Industry
For the Software industry and Technology sector, Paycom Software's Financial Strength distribution charts can be found below:
* The bar in red indicates where Paycom Software's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Paycom Software has a Z-score of 2.86, indicating it is in Grey Zones. This implies that Paycom Software is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.
Warning Sign:
Altman Z-score of 2.86 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.
* 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.
Paycom Software (PAYC) has a Financial Strength of 5 as of Jun. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Paycom Software and its competitors. This is 38% below median its historical median of 8.00. Over the past decade, Paycom Software's Financial Strength has ranged from 5.00 to 9.00.
Is Paycom Software's Financial Strength too high?
Paycom Software's current Financial Strength of 5 is 38% below median its 10-year median of 8.00. Over the past 10 years, this metric has ranged from a low of 5.00 to a high of 9.00. Overall, Paycom Software has a GF Score™ of 90/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Paycom Software's Financial Strength compare to ESTC and BSY?
Paycom Software's Financial Strength of 5 can be compared against companies in the Software industry. Historically, Paycom Software's own Financial Strength has ranged from 5.00 to 9.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for a Software company?
A good Financial Strength depends on the Software industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Paycom Software and its competitors. Paycom Software's current Financial Strength is 5, which is 38% below median its own 10-year median of 8.00. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Paycom Software stock overvalued right now?
Based on GuruFocus' analysis, Paycom Software (PAYC) is currently considered Modestly Undervalued. The stock's GF Value™ is $274.94, compared to a current price of $226.00 — trading 17.8% below its estimated fair value. The current Financial Strength is 5, which is 38% below median its 10-year median of 8.00. Paycom Software's overall GF Score™ is 90/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For Paycom Software (PAYC), the current Financial Strength is 5 as of Jun. 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 Paycom Software (PAYC) Overvalued in 2026?
Based on GuruFocus' analysis, Paycom Software stock appears to be undervalued.
The current stock price of $226.00 is trading 17.8% below its estimated GF Value™ of $274.94.
GuruFocus considers Paycom Software to be Modestly Undervalued.
Key valuation signals for PAYC:
Financial Strength: 5 (38% below median its 10-year median of 8.00)
GF Value™: $274.94 vs. price of $226.00 (17.8% below fair value)
No single metric tells the full story. See the PAYC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Founded in 1998, Paycom is a human capital management software-as-a-service provider addressing customer requirements surrounding payroll, talent acquisition, talent management, HR management, as well as time and labor. The company services businesses of all sizes within the United States and internationally. The company primarily generates revenue through the sale of subscriptions providing access to its HCM platform. To a lesser extent, the company also generates revenue from implementation services provided to customers as well as interest income generated from customer funds. As of fiscal 2024, the company serviced slightly over 37,500 customers and stored data on over 7 million employees.
90GF Score
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