Paychex is still up over 39% year-over-year
The shares of Paychex, Inc. (NASDAQ:PAYX) have been trending lower, despite the company's board of directors declaring a regular quarterly dividend of 66 cents per share last week, which will be payable on Feb. 24 to shareholders as of Jan. 31.
The equity was last seen testing a familiar floor at the $123 level, as it pulls pack from a Dec. 30, all-time high of $138.96. Plus, the shares have been slipping further below the 60-day moving average over the last couple of days. Year-over-year, PAYX remains up 39.8%.
Traders have been more bearish than usual over the last two weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), PAYX sports a 10-day put/call volume ratio of 5.52, which sits higher than 97% of readings from the past year.
The brokerage bunch echoes that pessimism. Of the 16 analysts in coverage, two say "sell" or worse, while 12 carry a "hold" rating, and the other two call PAYX a "strong buy."
From a fundamental point of view, the company’s valuation has far outgrown its own output. Paychex has generated consistent top and bottom-line growth, increasing its revenues and net income by 24% and 31%, respectively, since 2018. However, the stock has already priced in multiple years of growth.
Paychex stock currently trades at a price-earnings ratio of 34.95, and a price-sales ratio of 10.70, which are high considering the company's earnings and revenue projections. Overall, PAYX may continue to fall, as it looks to reach a more reasonable valuation.