The company’s shares fell immediately following the downgrade.

Wednesday wasn’t a great day for the employment services company Paychex. The company’s stock took a hit after being downgraded by a Bank of America analyst.

Analyst John Kupferberg downgraded Paychex from neutral to underperform, citing the company’s “underwhelming fundamentals” as the reason. However, Kupferberg held the company’s 12-month price target of $82. 

However, the downgrade isn’t entirely to blame for Paychex’s shares falling. The company’s stock was already down slightly after it delivered a disappointing fourth-quarter earnings report earlier that day.

Paychex misses the mark on its fourth-quarter earnings

When Paychex delivered its fourth-quarter earnings report, the company’s profits fell short of what investors were expecting. Paychex reported earnings of 63 cents per share which is higher than the 61 cents it earned last year, but lower than investor estimates of 65 cents per share.

However, the earnings report wasn’t all bad news. Paychex’s total revenue increased to $980.4 million and the company saw solid growth in several key areas of the company. The company’s revenue from its Management Solutions reached $694.9 million, which is up 4% from a year earlier. 

Revenue from the company’s PEO and insurance services were also up, reaching $263.3 million, which is 67% higher than a year earlier. And the company’s adjusted operating income reached $314.5 million, which is up 4% year over year. However, the company’s adjusted operating income margin is actually down from a year earlier.

Paychex also lowered its guidance for the fiscal year 2020. The company anticipates adjusted EPS growth of 8% to 9% while Wall Street was anticipating 9.2% growth.