How Will Paychex Stock React To Its Upcoming Earnings?

Paychex (NASDAQ:PAYX) is set to report its earnings on Wednesday, March 26, 2025. Analysts estimate the company’s upcoming earnings per share to be $1.48 on sales of $1.51 billion, a rise from the $1.38 earnings per share and $1.44 billion in sales reported in the corresponding quarter of the previous year. The company has $51 Bil in current market capitalization. Revenue over the last twelve months was $5.4 Bil, and it was operationally profitable with $2.2 Bil in operating profits and net income of $1.7 Bil. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative — having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

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Paychex’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 11 positive and 9 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 55% of the time.
• Notably, this percentage increases to 58% if we consider data for the last 3 years instead of 5.
• Median of the 11 positive returns = 3.4%, and median of the 9 negative returns =-4.2%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

PAYX observed 1D, 5D, and 21D returns post earnings

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

PAYX Correlation Between 1D, 5D and 21D Historical Returns

Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors. Separately, if you want upside with a smoother ride than an individual stock like Paychex, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

[1] Returns as of 3/24/2025
[2] Cumulative total returns since the end of 2016