Paychex Reports Mixed Q1 Results, Boosts EPS Growth Outlook
Paychex, Inc. has reported its fiscal first-quarter results, with adjusted earnings per share (EPS) of $1.22, slightly surpassing expectations. The company's shares initially reacted negatively, dropping up to 7.4% on the stock market following the announcement.
Paychex's total revenue for the quarter surged by 17% year over year to approximately $1.54 billion. Despite this growth, the company's operating margin contracted due to acquisition-related costs. The leadership team, headed by President and CEO John Gibson, maintained the revenue growth range for fiscal 2026 at 16.5% to 18.5%.
Looking ahead, management has boosted its outlook for fiscal 2026 adjusted EPS growth to 9% to 11%. However, Paychex's shares continue to trade around the mid-20s on a trailing price-to-earnings multiple. Notably, The Motley Fool's Stock Advisor did not include Paychex among its top 10 stocks to buy now.
Paychex's fiscal first-quarter results showed mixed signals, with revenue growth but a contracting operating margin. The company has maintained its revenue growth outlook and increased its EPS growth forecast. Despite this, Paychex's stock price initially reacted negatively, and it was not recommended by The Motley Fool's Stock Advisor.
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