Is Paychex Inc (PAYX) overvalued?
On Equity Rank's model estimate, PAYX trades close to its fair value (3% below it). Paychex Inc (PAYX) last closed at $117.06; the multi-method model fair value is $121.10.
| Price | Model fair value | Price vs model |
|---|---|---|
| $117.06 | $121.10 | 3% below |
What the answer rests on
- 6 of 10 valuation methods put PAYX's value above its price and 4 put it below, so the methods disagree.
- To justify today's price, PAYX's free cash flow would need to grow about 3.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 14.3% a year.
- Over the past year the price sat below the model fair value on 91% of trading days. The gap ranged from 35% below to 2% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind PAYX's fair value · What prices assume · Other companies