Paycom Software Trading at a ‘Nosebleed’ Valuation – Kerrisdale Capital

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Paycom Software (NYSE:PAYC) dipped in early Thursday trading after a new report from short-sellers Kerrisdale Capital.

The investment management firm claimed in the report that Paycom’s valuation “doesn’t come close to reflecting the near term headwinds of slowing employment growth, meaningful TAM saturation, and increasing competitive intensity.”

In a tweet, Kerrisdale said the company is trading at a nosebleed valuation, and there is a potential 50% downside for Paycom shares.

“Much like our $HUBS call in December, $PAYC is an ok biz still trading at a nosebleed bubble valuation. The looming job recession, intensifying competition & TAM saturation imply -50% for shares,” Kerrisdale tweeted.

Paycom shares have declined 23% in 2022. However, today’s short report has so far not had a lasting impact on the stock. It has regained nearly all of its earlier losses, currently trading down 0.07% on the day.

Paycom is set to report second-quarter earnings next week.

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