Paycom Faces BofA's Underperform Call and $200 Target

BofA Securities initiated coverage of Paycom Software (PAYC) with an underperform rating and a $200.00 price target. The target is below Paycom's previous closing price of $220.58.

BofA cited Paycom's mature payroll base, potentially limited upselling opportunities, and unproven strategy for moving into upmarket segments. The firm also noted Paycom's potential to generate profits and return capital through disciplined costs and share buybacks.

The bearish call contrasts with recent moves by UBS and KeyBanc, which raised their price targets after Paycom reported strong second-quarter results and improved guidance.