Paycom Software Inc. (PAYC) experienced a significant pre-market plunge of 9.02% on Thursday, following the release of disappointing financial guidance.
The sharp decline comes after the payroll software maker forecast 2026 revenue in the range of $2.18 billion to $2.20 billion, below analysts' average estimate of $2.23 billion. Businesses are delaying or reducing HR and payroll software purchases amid tighter budgets, creating headwinds for Paycom's new customer acquisition.
Adding to the negative sentiment, multiple analysts cut their target prices on Paycom shares. Jefferies reduced its target to $130 from $190, while TD Cowen cut its target to $137 from $184. The human capital management market has become increasingly competitive, with Paycom facing pressure from rivals such as ADP, Paylocity and Workday for market share.