TD Cowen Upgrades Paycom Software (PAYC) to Buy, PT $258

TD Cowen analyst Jared Levine upgraded Paycom Software (NYSE: PAYC) from Hold to Buy with a price target of $258.00.

The analyst comments "We are upgrading PAYC shares to Buy from Hold following positive indications from our TD Cowen 2025 Human Capital Management Survey and commentary at a recent conference on its near-term capex expectations. As a result, we have increasing conviction on PAYC sustaining double-digit growth & materially expanding FCF margins (~700 bps by FY27) over the medium term, positioning it to deliver upside to consensus estimates and warranting multiple expansion. In our 2025 HCM survey, most of its client satisfaction, retention, and growth metrics represented multi-year record levels and ranked amongst top 3 within our HCM coverage. Our detailed analysis of AI vs. non-AI related capex spend also suggests a better-than-feared outlook for capex requirements in out years, with our model projecting nearly 6-points of FCF margin expansion in FY26 y/y (to 24.0% vs. Street at 20.0%) as a result of the roll-off of up-front AI-related capex spend."

For an analyst ratings summary and ratings history on Paycom Software click here. For more ratings news on Paycom Software click here.

Shares of Paycom Software closed at $216.60 yesterday.

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