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Paycom’s revenue growth has slowed. But it’s still solid, in the high single digits.
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Management targets total revenue growth of approximately 9% by 2025.
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With the stock well below its 2021 peak, share buybacks are now more important to the thesis.
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10 stocks we like better than Paycom Software ›
Paycom software (NYSE: PAYC) Used to trade like the kind of software stocks you could buy, forget about, and revisit in five years.
But that stability has been disrupted in recent years. The stock is down about 72% from its all-time high reached in November 2021. The brutal pullback has likely rattled shareholders and caused some to move on.
But this begs the question: is this just a broken story, or is this a high-quality company experiencing a valuation reset? In fact, is this a buying opportunity?
Paycom sells payroll and human resources (HR) software, and its revenue base is overwhelmingly recurring. In other words, it’s not the kind of company where you’d typically expect to see its shares halved and then halved again.
But the stock’s pricey valuation in 2021 set the bar extremely high.
When a software company is priced for years of smooth and robust growth, any hint of a slowdown can cause investors to go back to the drawing board and reassess whether shares really deserve to trade at such a high valuation.
Paycom’s slowing growth ultimately led to a valuation reset for the stock.
Sure, the company is growing nicely, just not near the levels it grew at in 2021. In the third quarter of 2025, revenue increased 9.1% year over year to $493.3 million. This is a far cry from the 30.4% growth the company posted in the third quarter of 2021.
It’s no wonder the stock has fallen since 2021. That’s a dramatic slowdown.
Adding to pressure on the stock recently, even Paycom’s Q3 2025 results represented a sequential slowdown, as its 9.1% revenue growth was a slowdown from Q2’s 10.5% growth.
Still, there’s a lot to like.
First of all, Paycom’s 9.1% revenue growth in Q3 is still good growth. And the company’s recurring revenue growth is still in the double digits. Paycom’s ‘recurring and other’ revenue rose 10.6% year over year in the third quarter. It represents approximately 95% of total revenue and it is encouraging to see this important revenue stream continuing to grow at double digit rates.
Moreover, the company is doing very well when it comes to profitability trends. Starting with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), it rose from 37.9% in the prior-year quarter to 39.4% in the third quarter of 2025. Additionally, Paycom’s earnings per share rose an impressive 16.2% to $1.94 in the third quarter.
