Paycom (PAYC) to Report Q2 Earnings: What's in the Offing?

Paycom Software PAYC is set to report second-quarter 2021 results on Aug 3.

For the second quarter, management estimates revenues between $231 million and $233 million.

The Zacks Consensus Estimate for revenues is pegged at $232.2 million, indicating an increase of 27.9%, year over year. The consensus mark for earnings is 83 cents per share, suggesting a 33.9% rise from the prior-year quarter.

The company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 8.9%.

Let’s see how things have shaped up prior to the upcoming announcement.

Paycom Software, Inc. Price and EPS Surprise

Paycom Software, Inc. price-eps-surprise | Paycom Software, Inc. Quote

Factors at Play

Paycom’s quarterly performance is likely to have benefited from new business wins and the high-margin recurring revenue business. The firm’s employee usage strategy, sales efforts and investments are anticipated to have boosted sales growth during the period in discussion.

The company had earlier mentioned its intention to aggressively drive advertising and marketing efforts in order to generate more demo leads, virtual meetings and increased close rates of deals. This is likely to have led to further market-share gains for Paycom.

Nonetheless, Paycom’s quarterly performance is expected to have been hurt by the pandemic-triggered economic and business disruptions. Notably, some of the company’s businesses are directly related to the number of headcounts at its client offices.

Moreover, forms filing is likely to have been negatively impacted by reduced workforce in industries hardest hit by the pandemic, coupled with lower turnover in those industries.

What Our Model Says

Our proven model does not predict an earnings beat for Paycom this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Paycom currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release:

Avnet, Inc. AVT has an Earnings ESP of +9.82% and currently flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

CACI International CACI has an Earnings ESP of +6.62% and holds a Zacks Rank of 2, currently.

Arrow Electronics ARW has an Earnings ESP of +0.77% and carries a Zacks Rank #2, at present.

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