What Makes Paycom Software (PAYC) a Good Long-Term Business?

Polen Capital, an investment management company, released its “Polen US SMID Company Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The initial market optimism after the Presidential election gave way to fear and uncertainty in the first quarter of 2025. Against this backdrop, the fund returned -12.38% gross, and -12.65% net of fees compared to the Russell 2500 Growth Index return of -10.80%. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its first-quarter 2025 investor letter, Polen US SMID Company Growth Strategy highlighted stocks such as Paycom Software, Inc. (NYSE:PAYC). Paycom Software, Inc. (NYSE:PAYC) is a cloud-based human capital management solution provider. The one-month return of Paycom Software, Inc. (NYSE:PAYC) was 5.15%, and its shares gained 82.83% of their value over the last 52 weeks.  On June 6, 2025, Paycom Software, Inc. (NYSE:PAYC) stock closed at $265.71 per share, with a market capitalization of $14.884 billion.

Polen US SMID Company Growth Strategy stated the following regarding Paycom Software, Inc. (NYSE:PAYC) in its Q1 2025 investor letter:

“Paycom Software, Inc. (NYSE:PAYC), a cloud-native provider of human capital management software, delivered better-than-expected fourth quarter results and highlighted its best sales month ever in January as a testament to its progress with its automated BETI platform (Better Employee Transaction Interface is Paycom’s proprietary payroll tech logy platform). Stepping back, our long-term view is unchanged his is a business with highly recurring revenues, high customer retention, a fortress balance sheet, high insider ownership and alignment, and a clear and achievable path to sustained, multi-year double-digit EPS growth.”

Jim Cramer Praises Paycom Software (PAYC): “Great Human Capital Software”

A close-up of two software engineers typing away at laptops in a modern, well-lit office.

Paycom Software, Inc. (NYSE:PAYC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Paycom Software, Inc. (NYSE:PAYC) at the end of the first quarter, which was 35 in the previous quarter. In Q1 2025, Paycom Software, Inc. (NYSE:PAYC) reported total revenue of $531 million, marking an increase of 6% from Q1 2024. While we acknowledge the potential of Paycom Software, Inc. (NYSE:PAYC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Paycom Software, Inc. (NYSE:PAYC) and shared the list of stocks Jim Cramer put under a microscope. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.