How Much Is The Growth In Paychex’s Payroll Revenues Correlated To The Number Of Clients?

As you can see in the table below, a 1.2% annual increase in the number of clients served in the last five years led to a 3.8% increase in Paychex’s Payroll Processing revenues. The unemployment rate fell from about 10% in 2010 to under 6% through 2015. Paychex’s pricing (revenue generated per client) was up by about 2.5% in the same duration.

We forecast the revenue generated per client to grow at a faster pace than the historical rate (at a CAGR of 3.5% from 2016 through 2021) as economic conditions improve. Consequently, growth in payroll revenues could be as high as 5% in the next five years.

Have more questions about Paychex (NASDAQ:PAYX) ? See the links below:

• What’s Paychex’s Fundamental Value Based On Expected 2016 Results?
• What’s Paychex’s Revenue & Earnings Composition?
• How Has Paychex’s Revenue & EBITDA Composition Changed In The Last Five Years?
• Where Will Paychex’s Revenue Growth Come From In The Next Five Years?
• What’s ADP’s Fundamental Value Based On Expected 2016 Results?
• What’s ADP’s Revenue & EBITDA Breakdown By Segment?
• How Has ADP’s Revenue & EBITDA Composition Changed In The Last Five Years?
• Where Will ADP’s Revenue Growth Come From In The Next Five Years?

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