The investors in Paycom Software, Inc.'s (NYSE:PAYC) will be rubbing their hands together with glee today, after the share price leapt 28% to US$211 in the week following its quarterly results. It looks like a credible result overall - although revenues of US$452m were in line with what the analysts predicted, Paycom Software surprised by delivering a statutory profit of US$1.31 per share, a notable 13% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Paycom Software after the latest results.

View our latest analysis for Paycom Software

Taking into account the latest results, the consensus forecast from Paycom Software's 19 analysts is for revenues of US$2.07b in 2025. This reflects a decent 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decline 14% to US$7.27 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$2.07b and earnings per share (EPS) of US$7.07 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.4% to US$196. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Paycom Software at US$250 per share, while the most bearish prices it at US$150. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Paycom Software's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2025 being well below the historical 21% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% annually. Even after the forecast slowdown in growth, it seems obvious that Paycom Software is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Paycom Software following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Paycom Software going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Paycom Software you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.