Paychex Faces Growth Gap: Can It Deliver On 2026 Targets?

The primary challenge in Paychex Inc.'s PAYX latest results and guidance is reconciling the fiscal fourth quarter's 3% year-on-year organic revenue growth with the 5% guidance for fiscal 2026, according to Stifel.

The Paychex Analyst: Analyst David Grossman maintained a Hold rating, while reducing the price target from $156 to $152.

The Paychex Thesis: The company reported its fiscal fourth-quarter revenue at around $11 million, short of the midpoint of its guidance, "which management attributed to one week delay in closing PYCR acquisition," Grossman said in the note.

Check out other analyst stock ratings.

Paychex's Management Solutions, which accounts for 73% of total revenues, generated organic growth of 3%, which is comparable to the previous quarter's growth but below the 5% guidance announced for fiscal 2026, he added.

Management indicated that the timing of price hikes in the fiscal fourth quarter of the previous year was more favorable, creating a difficult comparison, the analyst stated.

"Normalizing for this pricing dynamic, F4Q organic management solutions growth was ~5%," he further wrote.

PAYX Price Action: Shares of Paychex had risen by 0.95% to $139.25 at the time of publication on Thursday.

Read Next:

• Trump’s Fed Chairman Shortlist Is In: What Investors Need To Know

Photo: Shutterstock