Paycom Software Q2: Stellar Performance, But It Got Away Too Quickly; Hold The Line (Downgrade)

Gytis Zizys 4.76K Followers Follow Summary Paycom delivered a strong Q2, with 10% revenue growth and broad-based operational improvements, driving a 23% post-earnings rally. Recurring revenue grew 11% y/y, margins expanded significantly, and non-GAAP EPS reached $2.78, highlighting accelerating profitability and robust free cash flow. Management raised FY26 guidance, with revenue now at $2.197B–$2.212B and adjusted EBITDA at $1.007B–$1.022B, both above consensus. Despite the rally, I recommend holding PAYC, not adding at current levels, but would consider buying on a meaningful pullback. wellesenterprises/iStock Editorial via Getty Images Paycom ( PAYC ) just reported quite an impressive Q2 print, which sent its shares skyrocketing on the day and hasn’t come down yet. I wanted to go over the numbers and talk a little about its outlook, and why you shouldn’t sell this This article was written by Gytis Zizys 4.76K Followers Follow MSc in Finance. Long-term horizon investor mostly with 2-5 year horizon. I like to keep investing simple. I believe a portfolio should consist of a mix of growth, value, and dividend-paying stocks but usually end up looking for value more than anything. I also sell options from time to time. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.