UPDATE: Stifel Reiterates On Paycom Software Inc Following Investor Meetings

In a report published Tuesday, Stifel analyst Brad Reback reiterated a Buy rating on

, and raised the price target from $18.00 to $20.00. In the report, Stifel noted, “We recently hosted investor meetings with Paycom's management team including, CEO Chad Richison and CFO Craig Boelte. Following the company's second consecutive healthy quarterly print since going public in April, investors were interested in hearing more about Paycom's position within the mid-market human capital management space and the company's strategy for driving continued growth in the coming quarters. "Additionally, investors questioned whether the company is reinvesting enough in their business as their R&D margins have historically been between 2%-3% on a quarterly basis, well below that of their peers and SaaS companies in general. Management reiterated their comments from their most recent earnings call, citing their single, independent database as being both a key point of differentiation and competitive advantage over their peers. We continue to believe that Paycom's end-to-end cloud-based HCM product offering, along with the potential for the opening of new sales offices and the up-sell/cross-sell of incremental modules to their installed customer base, will enable the company to further penetrate the large market opportunity that they have in front of them, and support healthy top-line growth and profitability. Coupled with an attractive valuation, we remain buyers.” Paycom Software closed on Monday at $17.16.