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Payroll Firm Paychex Lags Behind Market and Sector in 2025
20 Aug
Summary
- Paychex's stock up just 9.9% in past year, vs 16.1% for S&P 500
- Paychex down 1.9% YTD in 2025, while Industrial ETF up 14.6%
- Paychex Q4 2025 earnings beat expectations, but stock fell 9%
In 2025, payroll and HR services company Paychex has faced headwinds, underperforming both the broader market and its own industry sector. While the S&P 500 index has rallied nearly 16.1% over the past year, Paychex's stock has gained just 9.9% during the same period.
The company's struggles have been even more pronounced when compared to the Industrial Select Sector SPDR Fund (XLI), which has surged about 19% over the past year and is up 14.6% on a year-to-date basis in 2025. In contrast, Paychex's stock is down 1.9% so far this year.
Despite the company's recent underperformance, its Q4 2025 financial results did exceed Wall Street's expectations. Paychex reported adjusted earnings per share of $1.19, topping the consensus estimate of $1.18, while revenue came in at $1.43 billion, above the $1.41 billion forecast. However, the stock still closed more than 9% lower on the day of the earnings release.
Looking ahead, analysts expect Paychex's earnings per share to grow 9.6% to $5.46 on a diluted basis for the full fiscal year 2026. The company has a history of beating earnings expectations, having surpassed the consensus estimate in each of the last four quarters.
