Paychex Q1 Revenue Rises 6% to $1.6 Billion as PEO Guidance Raised

Yahoo Finance··US·Read original
3▲2 ▼2Impact / 5
Summary · why it matters

Paychex reported fiscal 2027 first-quarter revenue up 6% to $1.6 billion and adjusted EPS up 10% to $1.34, both ahead of expectations, yet the stock sold off sharply enough that JPMorgan upgraded the shares to Neutral from Underweight and raised its price target to $115 from $105, calling the reaction overdone. PEO and Insurance Solutions revenue jumped 12% to $367.6 million, prompting management to raise full-year PEO guidance to 7% - 8% from 6% - 7%, while total revenue guidance held at 5% - 6%. CEO John Gibson said new logo PEO sales and ASO-to-PEO conversions accelerated together, running roughly double plan, with enterprise bookings up double digits and broker referrals up 43% year-over-year after a third national broker partnership in six months with IMA Financial Group. Management Solutions growth slowed to 4% from roughly 5.5% in the fourth quarter, which CFO Bob Schrader attributed mostly to ASO clients shifting into PEO, calling it left pocket, right pocket. BMO Capital cut its target to $113 from $118, Stifel cut to $112 from $130, and Jefferies trimmed to $110 from $120, with Jefferies saying investors want proof the segment has stabilized before rewarding PEO strength.

Impact on assets 6

Cloud & Digital Infrastructure▲ · 2 stocks
Paychex Inc
PAYX
▲ PositiveCapitalDemandrelevance

Q1 revenue up 6% to $1.6B and adjusted EPS up 10% to $1.34 beat expectations, with PEO guidance raised to 7%-8%.

Financials▼ · 2 stocks
Jefferies Financial Group Inc
JEF
▼ NegativeCapitalrelevance

Jefferies trimmed its Paychex price target to $110 from $120, saying investors want proof the segment has stabilized.

Digital Finance & Tokenization▲ · 1 stocks
JPMorgan Chase & Co
JPM
▲ PositiveCapitalrelevance

JPMorgan upgraded Paychex to Neutral from Underweight and raised its price target to $115 from $105, calling the selloff overdone.

Information Technology▲ · 1 stocks

Off-coverage companies 1

IMA Financial GroupPrivate± Mixed
relevance

© 2026 MarketIVNews