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Key Takeaways
- Shares of payroll and HR software provider Paycom Software surged 21% on Thursday, posting the biggest gain in the S&P 500.
- Paycom exceeded third-quarter sales and profit estimates as the strong labor market boosted demand for the company’s workforce management services.
- With Thursday’s gain, Paycom shares moved back into positive territory for 2024.
Paycom Software (PAYC) shares skyrocketed 21% on Thursday, posting the top daily performance in the S&P 500, after the payroll and human resources software firm reported better-than-expected sales and profits for the third quarter.
Strength in the jobs market, with a cooldown in inflation, is underpinning a steady pace of hiring and has helped boost demand for Paycom’s employee management solutions.
Paycom reported robust sales growth in the third quarter, with total revenue jumping 11.2% year-over-year. Recurring revenue was up 11.6% for Paycom, accounting for 98.5% of Paycom’s total revenue. This is highly desirable for software and service providers like Paycom because it represents a stable stream of expected sales.
Paycom stock struggled for the first half of 2024, reaching summer lows beneath $140 per share. However, the trend has been more positive since mid-July, and with Thursday’s surge shares moved back above $200 and into positive territory for the year.
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