Using the PEG framework with analyst consensus forward EPS growth of 15.5% plus 4.3% dividend yield, Paychex, Inc. has a fair value of $85.06 based on NTM EPS (FY2026) of $5.49. The current PEG ratio is 1.10.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 11.2% |
| Dividend Yield | +4.3% |
| Adjusted Growth (clamped 8–25%) | 15.5% |
| Fair P/E | 15.5x |
| NTM EPS (FY2026) | $5.49 |
| Fair Value | $85.06 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $4.58 | — | — |
| FY2026E | $5.49 | +19.9% | 14 |
| FY2027E | $5.91 | +7.6% | 14 |
| FY2028E | $6.29 | +6.5% | 12 |
3Y Forward EPS CAGR: 11.2%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $1.1B | $3.03 | — |
| FY2022 | $1.4B | $3.84 | +26.7% |
| FY2023 | $1.6B | $4.30 | +12.0% |
| FY2024 | $1.7B | $4.67 | +8.6% |
| FY2025 | $1.7B | $4.58 | -1.9% |
4Y Historical EPS CAGR: 10.9%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.