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DCF Valuation
Base-case fair value
$138.65
Intrinsic $184.87 · 25% MOS
Current price: $97.58
Base-case summary
Our base-case DCF for Paychex Inc (PAYX) projects 10 years of free cash flow growth at 12.9% for years 1–5 and 6.5% for years 6–10, anchored to 12.9% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $2.1B in trailing free cash flow, this produces an intrinsic value of $184.87 per share. A 25% safety margin gives a fair value of $138.65, suggesting the stock is currently 42% undervalued against the $97.58 market price.
See 3 scenarios side by side
Conservative, Base, and Optimistic fair values, plus the sensitivity matrix and FCF history. Free account.
Model inputs
TTM Free Cash Flow
$2.1B
Cash & equivalents
$1.8B
Total debt
$5.0B
Shares outstanding
360M