This May Be the Start of Paychex Stock's Bearish Run

Why PAYX investors may want to consider selling out

facebook X logo linkedin

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%.

PAYX 60 Day

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.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI