13 Most Profitable Software Stocks to Buy Now

8. Paychex, Inc. (NASDAQ:PAYX)

Net Income (TTM): $1.6 billion

Number of Hedge Fund holdings: 53

As of February 12, Paychex, Inc. (NASDAQ:PAYX) is trading at one of its lowest levels over the past year, at $92.47. This is slightly higher than the 52-week low of $91.70.

Earlier, on January 27, Cantor Fitzgerald started coverage on Paychex, Inc. (NASDAQ:PAYX) with an Underweight rating and a price target of $98. As the lowest 1-year price target, the firm’s guidance translates to an upside potential of 3.33%. According to the firm, intensifying competition in the small and medium-sized business (SMB) space, alongside broader macroeconomic challenges, is adversely affecting the company’s ability to drive organic top-line growth.

Although Cantor Fitzgerald accepted that the recent acquisition of Paycor will improve Paychex, Inc. (NASDAQ:PAYX)’s up-market capabilities, a move it described as “largely defensive,” the firm noted that the company’s long-term organic growth picture remains blurry. With a record of robust free cash flow generation and shareholder-friendly cash returns, the company is expected to sustain its momentum, Cantor Fitzgerald asserted.

Paychex, Inc. (NASDAQ:PAYX) is a New York-based provider of human capital management solutions (HCM). Founded in 1971, the company offers payroll processing, employee payment, and retirement solutions, among other services.