Paycom (PAYC) Soars 4.4%: Is Further Upside Left in the Stock?

Paycom Software PAYC shares ended the last trading session 4.4% higher at $129.84. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 20.6% loss over the past four weeks.

The optimism surrounding the stock can be attributed to Strong adoption of Paycom’s AI-led products, especially IWant and Beti, which is helping customers reduce manual work and payroll errors, improving customer retention and helping the company win new clients.

This maker of human-resources and payroll software is expected to post quarterly earnings of $2.44 per share in its upcoming report, which represents a year-over-year change of +5.2%. Revenues are expected to be $542.71 million, up 9.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Paycom, the consensus EPS estimate for the quarter has been revised 0.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. 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 #3 (Hold). 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, Pinterest PINS, closed the last trading session 4.3% lower at $19.87. Over the past month, PINS has returned -23.3%.

Pinterest's consensus EPS estimate for the upcoming report has changed -45.5% over the past month to $0.66. Compared to the company's year-ago EPS, this represents a change of +17.9%. Pinterest currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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