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MARKETS LIVE BLOG:

STOCKS RISE AS TECHS REVIVE, WITH NETFLIX EARNINGS ON TAP

Tesla shares slide to 52-week low; stock is down roughly 40% year-to-date

Paychex (PAYX) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Zacks Equity Research
·2 min read

For the quarter ended February 2023, Paychex (PAYX) reported revenue of $1.38 billion, up 8.2% over the same period last year. EPS came in at $1.29, compared to $1.15 in the year-ago quarter.

The reported revenue represents a surprise of +1.48% over the Zacks Consensus Estimate of $1.36 billion. With the consensus EPS estimate being $1.24, the EPS surprise was +4.03%.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

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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: $1.02 billion compared to the $1.01 billion average estimate based on seven analysts. The reported number represents a change of +6.7% year over year.

  • Revenue- Interest on funds held for clients: $35.30 million compared to the $29.98 million average estimate based on seven analysts. The reported number represents a change of +145.1% year over year.

  • Revenue- Total service revenue: $1.35 billion versus $1.33 billion estimated by seven analysts on average. Compared to the year-ago quarter, this number represents a +6.7% change.

  • Revenue- PEO and Insurance Services: $321.20 million versus $320.60 million estimated by seven analysts on average. Compared to the year-ago quarter, this number represents a +6.5% change.

View all Key Company Metrics for Paychex here>>>

Shares of Paychex have returned -1.3% over the past month versus the Zacks S&P 500 composite's +0.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could underperform the broader market in the near term.

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Paychex, Inc. (PAYX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research