Payroll and human resource (HR) outsourcing service provider
) recently announced the takeover of the expense management
business ("ExpenseWire") of Rearden Commerce Inc. for an
Rearden Commerce develops e-commerce applications, which allow
customers to purchase its products or services online. In 2008,
the company acquired ExpenseWire, a leading provider of real time
expense management solutions. The online solutions streamline and
automate the processes associated with the filing, review,
approval and reimbursement of employee expense reports. The
solution helps organizations to monitor and manage travel
expenses of their employees as well.
Paychex has been using the software since 2008. Paychex agreed to
resell the app along with its web-based Expense Management suite,
which is mostly similar to the ExpenseWire solution. Now that the
business is completely owned by Paychex, it can retain the entire
earnings out of the business.
Expense Management is an integral part of Paychex's HR Services
segment. Hence, we believe that the addition of new capabilities
would attract professional employer organizations, thus
generating revenue growth.
Earlier this year, Paychex acquired online and PC-based time and
attendance solutions provider, Icon Time Systems Inc. for an
undisclosed amount. The acquisition has supported growth within
Paychex's Payroll Service segment.
The company's initiative for boosting its revenue growth through
acquisitions is encouraging. Also, the improving trend in SMB IT
spending could pave the way for Paychex in the coming quarters.
But we can see that low hiring in the small and medium business
(SMB) sector (leading to lower checks per client) and lack of new
business wins has come in the way of solid revenue growth.
We also remain concerned regarding stiff competition from
Automatic Data Processing Inc.
Currently, Paychex has a Zacks #4 Rank, (Sell), while both Intuit
and ADP have a Zacks #3 Rank (Hold).
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PAYCHEX INC (PAYX): Free Stock Analysis
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