Paychex, Inc. (PAYX) DCF Valuation
Transparent DCF models put Paychex, Inc. (PAYX)'s fair value in a range of $64.18 – $132.06 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $101.10 sits within that range — roughly fairly valued on these assumptions.
Reverse DCF: at today's $101.10, the market is pricing in roughly +10.5%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +13.6%. The price assumes a slowdown from its track record — a potential value signal if growth holds.
Current Price
$101.10
Fair-Value Range
$64.18 – $132.06
Market-Implied Growth
+10.5%/yr
vs +13.6% 5Y actual
PAYX DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $1.6B · 0.36B shares · net debt $3.3B
Estimated Fair Value
$64.18
-36.5% vs $101.10
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $101.10; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $82.02 | $86.71 | $92.24 | $98.88 | $107 |
| 9.0% | $69.14 | $72.34 | $76.03 | $80.34 | $85.44 |
| 10.0% | $59.32 | $61.60 | $64.18 | $67.13 | $70.53 |
| 11.0% | $51.61 | $53.28 | $55.14 | $57.24 | $59.62 |
| 12.0% | $45.39 | $46.64 | $48.03 | $49.57 | $51.29 |
About Paychex, Inc.
Founded in 1971 and headquartered in Rochester, New York, Paychex, Inc. delivers comprehensive human capital management (HCM) solutions. The company primarily serves small to medium-sized enterprises (SMEs) across the United States, Europe, and India, addressing their needs in human resources, payroll administration, employee benefits, and insurance. Its diverse service portfolio includes: Payroll Management: Encompassing core payroll processing, payroll tax administration, employee payment facilitation, and ensuring compliance with regulations like new-hire reporting and garnishment processing. Human Resources Solutions: Providing support for employer compliance, HR and employee benefits administration, risk management outsourcing, and even the availability of professionally trained on-site HR representatives. Retirement Services: Offering full administration for retirement plans, which covers implementation, ongoing adherence to government regulations, reporting for both participants and employers, online access capabilities, electronic funds transfers, and other administrative tasks. Cloud-based HR Software: A suite of software products designed for efficient HR administration, including tools for benefits management, time and attendance tracking, digital communication, recruitment, and onboarding processes. Additional Business Services: This category features plan administration outsourcing, state unemployment insurance services, and various support functions for SMBs such as payroll funding and outsourcing (including payroll processing, invoicing, and tax preparation), payment processing solutions, financial wellness programs, and a resource center for small business loans. Insurance Offerings: Providing both property and casualty coverage, which includes workers' compensation, business-owner policies, cybersecurity protection, and commercial auto insurance, alongside health and benefits coverage like medical, dental, vision, and life insurance. Paychex primarily distributes its services through its dedicated direct sales team.
- Sector
- Industrials
- Industry
- Staffing & Employment Services
- CEO
- John Gibson Jr.