(Reuters) – Paycom Software’s shares lost over a third of their value before the bell on Wednesday, after the payroll processor forecast a weak revenue for the fourth quarter as economic uncertainty persists.
The stock was last trading at $157.75 premarket, down 35.6%, and set to open at its lowest levels since early 2019, if current levels hold.
The plunge would wipe out more than $5 billion off the company’s market capitalization.
After markets closed on Tuesday, the company said it was expecting fourth-quarter revenue in the range of $420 million to $425 million, compared with analysts’ average estimate of $452.3 million, according to LSEG data.
“With higher uncertainty and lower visibility, we do not have a basis to recommend shares,” brokerage TD Cowen wrote in a note, cautioning that trading in the stock would remain range-bound as investors seek more detail on a potential recovery.
Paycom’s competitor Ceridian HCM Holding’s shares also lost 4% in premarket trading.
(Reporting by Niket Nishant in Bengaluru; Editing by Shilpi Majumdar)
