DCF Tool

PAYC

Paycom Software Inc – Software Publishers
As a leader in payroll and HR technology, Oklahoma City-based Paycom redefines the human capital management industry by allowing companies to effectively navigate a rapidly changing business environment. Its cloud-based software solution is based on a core system of record maintained in a single database for all human capital management functions, providing the functionality that businesses need to manage the complete employment lifecycle, from recruitment to retirement. Paycom has the ability to serve businesses of all sizes and in every industry. As one of the leading human capital management providers, Paycom serves clients in all 50 states from offices across the country.
Analysis Results
Intrinsic Value $48.17
Latest Price $318.76
Relative Value 562% overvalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 25.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 12.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 25.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 170 150
2023 213 168
2024 268 187
2025 337 208
2026 424 232
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 4010 million. This corresponds to a present value of 1950 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 945 million. Adding in the terminal value gives a total present value of 2890 million.

There are presently 60.0 million outstanding shares, so the intrinsic value per share is 48.17.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,252,038,000
Current Cash 277,978,000
Current Liabilities 1,990,410,000
Current Debt 1,775,000
Non-Cash Working Capital (NCWC) -14,575,000
Change in NCWC -11,215,000
EBIT 253,567,000
Tax Provision 60,002,000
Depreciation and Amortization 67,222,000
Capital Expenditure -126,192,000
Unlevered Free Cash Flow 123,941,430
Current Assets 1,864,605,000
Current Cash 151,710,000
Current Liabilities 1,718,030,000
Current Debt 1,775,000
Non-Cash Working Capital (NCWC) -3,360,000
Change in NCWC 10,954,000
EBIT 186,123,000
Tax Provision 42,483,000
Depreciation and Amortization 53,373,000
Capital Expenditure -94,102,000
Unlevered Free Cash Flow 113,822,273
Current Assets 1,871,100,000
Current Cash 133,667,000
Current Liabilities 1,753,522,000
Current Debt 1,775,000
Non-Cash Working Capital (NCWC) -14,314,000
Change in NCWC -6,311,000
EBIT 226,224,000
Tax Provision 45,511,000
Depreciation and Amortization 42,211,000
Capital Expenditure -92,934,000
Unlevered Free Cash Flow 123,651,422
Current Assets 1,064,622,000
Current Cash 45,718,000
Current Liabilities 1,028,682,000
Current Debt 1,775,000
Non-Cash Working Capital (NCWC) -8,003,000
Change in NCWC 27,476,000
EBIT 173,715,000
Tax Provision 37,646,000
Depreciation and Amortization 29,657,000
Capital Expenditure -59,906,000
Unlevered Free Cash Flow 133,510,613
Current Assets 1,149,862,000
Current Cash 46,077,000
Current Liabilities 1,140,152,000
Current Debt 888,000
Non-Cash Working Capital (NCWC) -35,479,000
Change in NCWC -3,123,000
EBIT 78,625,000
Tax Provision 9,840,000
Depreciation and Amortization 19,395,000
Capital Expenditure -59,389,000
Unlevered Free Cash Flow 25,414,062
Current Assets 925,583,000
Current Cash 60,158,000
Current Liabilities 898,894,000
Current Debt 1,113,000
Non-Cash Working Capital (NCWC) -32,356,000
Change in NCWC -16,132,000
EBIT 57,971,000
Tax Provision 13,403,000
Depreciation and Amortization 13,632,000
Capital Expenditure -43,805,000
Unlevered Free Cash Flow -1,907,455
Current Assets 761,138,000
Current Cash 50,714,000
Current Liabilities 727,534,000
Current Debt 886,000
Non-Cash Working Capital (NCWC) -16,224,000
Change in NCWC -6,556,000
EBIT 34,435,000
Tax Provision 12,580,000
Depreciation and Amortization 9,421,000
Capital Expenditure -16,549,000
Unlevered Free Cash Flow 7,829,529

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