Paychex stock currently trades at $116 per share, around 18% below its level of $141 seen on April 6, 2022 (pre-inflation shock high), and has the potential for gains. Paychex
PAYX
saw its stock trading at around $114 at the end of June 2022, just before the Fed started increasing rates, and remains marginally up from these levels. In comparison, the S&P 500 gained about 18% during this period. Paychex stock has benefited from a reasonably strong job market and an expanding client base, higher employees per client, and higher per-customer revenue. Paychex posted a stronger-than-expected set of Q4 FY’23 results (the quarter ended May 31). Revenue grew 7% year-over-year to $1.230 billion, while adjusted net income stood at about $0.97 per share, up from $0.81 in the year-ago quarter.
Interestingly, PAYX has had a Sharpe Ratio of 0.5 since early 2017, lower than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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