Paycom Stock Is Plunging Wednesday: What's Going On?

Paycom Software Inc PAYC shares are tumbling Wednesday after the company reported disappointing top-line results and issued weak guidance. Several analysts also downgraded the stock following the print.

• Q3 Revenue: $406.3 million missed estimates of $411.18 million
• Q3 EPS: $1.77 beat estimates of $1.61

Total revenues were up 21.6% year-over-year. Total debt was $29 million as of Sept. 30. The company ended the quarter with $484 million in cash and equivalents. 

"Our third quarter fundamentals were strong with solid revenue and earnings growth. Our innovations have transformed the payroll and HCM industry for 25 years, and we're excited to deliver even stronger value to our clients for years to come," said Chad Richison, founder, chairman and CEO of Paycom.

Outlook: Paycom sees fourth-quarter revenue in the range of $420 million to $425 million versus estimates of $452.27 million. The company anticipates full-year revenue of $1.679 billion to $1.684 billion versus estimates of $1.72 billion.

See Also: Why Are Cosmetics Major Estee Lauder's Shares Diving Today?

Analyst Assessment:

• Piper Sandler analyst Arvind Ramnani downgraded Paycom from Overweight to Neutral and lowered the price target from $399 to $185.
• Oppenheimer analyst Brian Schwartz downgraded Paycom from Outperform to Perform.
• Deutsche Bank analyst Brad Zelnick downgraded Paycom from Buy to Hold and lowered the price target from $400 to $175.
• Keybanc analyst Jason Celino downgraded Paycom from Overweight to Sector Weight.
• Needham analyst Joshua Reilly downgraded Paycom from Buy to Hold.
• TD Cowen analyst Bryan Bergin downgraded Paycom from Outperform to Market Perform and lowered the price target from $331 to $202.
• Stifel analyst Brad Reback downgraded Paycom from Buy to Hold and lowered the price target from $400 to $160.
• Citigroup analyst Steven Enders downgraded Paycom from Buy to Neutral and lowered the price target from $360 to $189.
• William Blair analyst Matthew Pfau downgrades Paycom from Outperform to Market Perform.

PAYC Price Action: Paycom shares were down 36.9% at $154.50 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Paycom.