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Compared to Estimates, Paychex (PAYX) Q3 Earnings: A Look at Key Metrics

Zacks Equity Research
·2 min read

Paychex (PAYX) reported $1.44 billion in revenue for the quarter ended February 2024, representing a year-over-year increase of 4.2%. EPS of $1.38 for the same period compares to $1.29 a year ago.

The reported revenue represents a surprise of -1.44% over the Zacks Consensus Estimate of $1.46 billion. With the consensus EPS estimate being $1.36, the EPS surprise was +1.47%.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

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Here is how Paychex performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

  • Revenue- Management Solutions: $1.05 billion versus the six-analyst average estimate of $1.07 billion. The reported number represents a year-over-year change of +2.5%.

  • Revenue- Interest on funds held for clients: $43.90 million versus $40.24 million estimated by six analysts on average. Compared to the year-ago quarter, this number represents a +24.4% change.

  • Revenue- Total service revenue: $1.40 billion compared to the $1.42 billion average estimate based on six analysts. The reported number represents a change of +3.7% year over year.

  • Revenue- PEO and Insurance Services: $345.50 million versus $347.89 million estimated by six analysts on average. Compared to the year-ago quarter, this number represents a +7.6% change.

View all Key Company Metrics for Paychex here>>>

Shares of Paychex have returned -0.6% over the past month versus the Zacks S&P 500 composite's +2.2% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.

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Zacks Investment Research