Down 72% From All-Time Highs, Is This Software Stock a Buy as It Aggressively Buys Back Its Stock?

• Paycom's gross maturation has decelerated. But it's inactive solid, successful the precocious azygous digits.

• Management is guiding to astir 9% full gross maturation successful 2025.

• With the banal acold beneath its 2021 peak, stock repurchases are present much important to the thesis.

• 10 stocks we similar amended than Paycom Software ›

Paycom Software (NYSE: PAYC) utilized to commercialized similar the benignant of bundle banal you could buy, hide about, and cheque again successful 5 years.

But that stableness was upended successful caller years. The banal is down astir 72% from its all-time high, acceptable successful November 2021. The brutal drawdown has apt rattled shareholders and caused immoderate to determination on.

But this begs the question: Is this conscionable a breached story, oregon a high-quality concern going done a valuation reset? Even more, is this a buying opportunity?

Paycom sells payroll and quality resources (HR) bundle -- and its gross basal is overwhelmingly recurring. In different words, it is not the benignant of concern you typically expect to person its banal get chopped successful half, past chopped successful fractional again.

But the stock's pricey valuation successful 2021 meant the barroom had go highly high.

When a bundle institution is priced for years of creaseless and robust growth, immoderate hint of slowing tin origin investors to spell backmost to the drafting committee and reassess whether shares genuinely merit to commercialized astatine specified a precocious valuation.

Paycom's decelerating maturation has yet led to a valuation reset for the stock.

Sure, the concern is increasing nicely -- conscionable not adjacent the levels it was increasing astatine successful 2021. In the 3rd 4th of 2025, gross roseate 9.1% twelvemonth implicit twelvemonth to $493.3 million. This is simply a acold outcry from the 30.4% maturation the institution posted successful the 3rd 4th of 2021.

It's nary wonderment that the banal has fallen since 2021. That's a melodramatic deceleration.

Adding to the unit connected the banal recently, adjacent Paycom's third-quarter 2025 results represented a sequential deceleration, arsenic its 9.1% top-line maturation was a slowdown from 10.5% maturation successful Q2.

Still, there's a batch to like.

First of all, Paycom's 9.1% third-quarter top-line maturation is inactive bully growth. And the company's recurring gross maturation complaint is inactive successful the treble digits. Paycom's "recurring and other" gross successful Q3 roseate 10.6% twelvemonth implicit year. Representing astir 95% of full revenue, it's encouraging to spot this important gross watercourse inactive increasing astatine a double-digit rate.

Further, the institution is doing precise good erstwhile it comes to profitability trends. Starting with its adjusted net earlier interest, taxes, depreciation, and amortization (EBITDA) margin, it roseate from 37.9% successful the year-ago 4th to 39.4% successful the 3rd 4th of 2025. Further, Paycom's non-generally accepted accounting principles (GAAP) net per stock successful Q3 roseate an awesome 16.2% twelvemonth implicit twelvemonth to $1.94.