Paychex, Inc. PAYX will release its second-quarter fiscal 2025 results on Dec. 19, before the bell.

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The company has a decent earnings surprise history, with earnings surpassing the Zacks Consensus Estimate in all the four trailing quarters. The average earnings surprise stands at 1.5%.

Expectations From PAYX in Q2

The Zacks Consensus Estimate for the top line is currently pegged at $1.31 billion, indicating growth of 4.4% from the year-ago actual figure. Revenues from Management Solutions are expected to rise 2.7% year over year. Our estimate currently stands at $955.5 million. We expect an increased number of clients and product penetration.

Our estimate for PEO and insurance solution revenue is currently pegged at $319.4 million, which indicates an 8% increase from the year-ago reported figure. We expect an increase in the average number of worksite employees and a rise in PEO insurance revenues as factors for the growth.

We expect interest on funds held for clients to increase around 16.8% year over year to $36.8 million, driven by higher average interest rates and average investment balances.

The consensus estimate for the bottom line in the to-be-reported quarter is $1.12 per share, which indicates 3.7% year-over-year growth. The continuing trend of demand and revenue growth is expected to have driven the increase.

What Our Model Says

Our proven model predicts a likely earnings beat for PAYX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

PAYX has an Earnings ESP of +0.53% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Results of Key Sector Players

Omnicom OMC reported impressive third-quarter 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.

OMC’s earnings of $2 per share beat the consensus estimate by 3.1% and increased 9.1% year over year. Total revenues of $3.9 billion surpassed the consensus estimate by 2.3% and increased 8.5% year over year.

Equifax EFX reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the same.

EFX’s adjusted earnings were $1.8 per share, beating the Zacks Consensus Estimate by a slight margin and increasing by 5.1% from the year-ago quarter’s actual. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but increased 9.3% from the year-ago quarter.

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