Out of the Gate: Paychex Declines

Paychex posted a nearly 10 percent rise in sales to $532.2 million, just missing the $533.3 million expected by analysts. Profit rose 13 percent to meet estimates.

Baird analyst Mark Marcon, who has an "Outperform" rating on the stock, attributed slowing sales growth to a deteriorating economy.

"Management clearly noted that they are starting to see more signs of a slowing economy than they have in recent quarters, which had a slight negative impact on the fiscal third-quarter selling season," Marcon wrote in a client note.

But Marcon said 10 percent sales growth is "quite solid," given the softening U.S. economy.

Marcon also likes long-term growth prospects, saying that the outsourced payroll market is "still underpenetrated."

Shares slipped 34 cents to $32.54 in morning trading.