Jun. 26, 2025 9:00 PM ETPaycom Software, Inc. (PAYC) StockPAYCMountainside Research466 Followers(11min)SummaryI recommend a 'Hold' rating on Paycom due to robust unit economics, but concerns about moderate churn and elevated capital expenditures.Paycom boasts impressive 85%+ gross margins, indicating strong pricing power and competitive positioning in the payroll software market.High capital expenditures, especially on real estate and data centers, limit free cash flow and diverge from typical software company strategies.While Paycom's valuation is in line with peers, its free cash flow yield is less attractive, making better options available for focused investors.wellesenterprisesInvestment ThesisWith this analysis, I am beginning my coverage on Paycom Software, Inc. (NYSE:PAYC) by recommending a ‘Hold’ rating for long-term investors. While I believe they have built a robust business fueled by favorable unit economics, their business is beset with moderateThis article was written byMountainside Research466 FollowersFollow for analysis of software and technology companies.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.CommentsRecommended For You