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Market Overview

Paychex's Earnings Outlook

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On Wednesday, December 23, Paychex (NASDAQ:PAYX) will release its latest earnings report. Decipher the announcement with Benzinga's help.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Wall Street expects EPS of $0.66 and sales around $953.97 million. In the same quarter last year, Paychex reported EPS of $0.7 on revenue of $990.70 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to post earnings in line with the consensus estimate when it reports Wednesday, EPS would be down 5.71%. Revenue would have fallen 3.71% from the same quarter last year. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q1 2020 Q4 2020 Q3 2020 Q2 2019
EPS Estimate 0.55 0.60 0.96 0.68
EPS Actual 0.63 0.61 0.97 0.70
Revenue Estimate 895.38 M 910.91 M 1.14 B 987.65 M
Revenue Actual 932.20 M 951.10 M 1.14 B 990.70 M

Stock Performance

Shares of Paychex were trading at $96.59 as of December 21. Over the last 52-week period, shares are up 14.27%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Paychex is scheduled to hold the call at 09:30:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings