Paycom Software PAYC shares soared 3.8% in the last trading session to close at $129.18. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9% loss over the past four weeks.
The optimism surrounding the stock can be attributed to Paycom’s automation-led product design, expanding global capability, disciplined sales execution and stickiness of the product.
This maker of human-resources and payroll software is expected to post quarterly earnings of $2.28 per share in its upcoming report, which represents a year-over-year change of +10.7%. Revenues are expected to be $512.29 million, up 5.9% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Paycom, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on PAYC going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Paycom belongs to the Zacks Internet - Software industry. Another stock from the same industry, Vertex VERX, closed the last trading session 4.9% higher at $11.37. Over the past month, VERX has returned -14.2%.
For Vertex, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.19. This represents a change of +26.7% from what the company reported a year ago. Vertex currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
