Paychex (NASDAQ: PAYX) notched slight beats on both the top and bottom lines in its latest quarter. Consequently, its share price rose slightly on the news. The financial services company’s stock bumped 1.4% higher across Thursday’s trading session, which was a better performance than the benchmark S&P 500 index’s marginal decline.
Paychex unveiled its second quarter of fiscal 2025 results before market open on Thursday, revealing that it earned just under $1.32 billion in total revenue. That was an improvement of 5% over the same period last year. The dynamic was similar on the bottom line, as non-GAAP (adjusted) net income enjoyed 5% year-over-year growth to $411 million ($1.14 per share).
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
Both headline numbers edged past the consensus analyst estimates. On average, pundits tracking Paychex stock were modeling $1.31 billion on the top line and $1.13 per share for adjusted net income.
In its earnings release, Paychex said that its core management-solutions business grew by 3% (to almost $963 million) on the back of an increase in client count. What also helped was higher product penetration in fields such as human-resources solutions and retirement.
Management reiterated the guidance it provided for the entirety of fiscal 2025. It continues to expect 4% to 5% revenue growth for the period compared to fiscal 2024, with 5% to 7% expansion in adjusted, per-share net income.
Paychex feels like a “steady as she goes” business these days, and as long as a rising economy keeps small and mid-sized businesses (SMBs) afloat, the company should do fine. The company continues to hand out a relatively generous dividend that yields nearly 3%, so it might be of particular interest to income investors looking for something of an under-the-radar play.
Before you buy stock in Paychex, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Paychex wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $790,028!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of December 16, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
