Paycom Software (NYSE: PAYC) is one of 97 publicly-traded companies in the “Enterprise Software” industry, but how does it contrast to its rivals? We will compare Paycom Software to similar companies based on the strength of its risk, earnings, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Profitability

This table compares Paycom Software and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paycom Software 14.28% 35.77% 4.63%
Paycom Software Competitors -24.91% -210.75% -7.83%

Volatility and Risk

Paycom Software has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500. Comparatively, Paycom Software’s rivals have a beta of 1.13, suggesting that their average share price is 13% more volatile than the S&P 500.

Institutional & Insider Ownership

86.1% of Paycom Software shares are held by institutional investors. Comparatively, 60.0% of shares of all “Enterprise Software” companies are held by institutional investors. 17.9% of Paycom Software shares are held by company insiders. Comparatively, 23.0% of shares of all “Enterprise Software” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Paycom Software and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Paycom Software $382.87 million $73.92 million 86.10
Paycom Software Competitors $1.27 billion $348.15 million 36.11

Paycom Software’s rivals have higher revenue and earnings than Paycom Software. Paycom Software is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Paycom Software and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paycom Software 0 4 10 0 2.71
Paycom Software Competitors 345 2057 3907 107 2.59

Paycom Software currently has a consensus price target of $77.50, suggesting a potential downside of 3.21%. As a group, “Enterprise Software” companies have a potential upside of 2.35%. Given Paycom Software’s rivals higher possible upside, analysts plainly believe Paycom Software has less favorable growth aspects than its rivals.

Summary

Paycom Software beats its rivals on 8 of the 13 factors compared.

About Paycom Software

Paycom Software, Inc. is a provider of a cloud-based human capital management (HCM) software solution delivered as Software-as-a-Service (SaaS). The Company provides functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement. The Company’s applications streamline client processes and provide clients and their employees with the ability to directly access and manage administrative processes, including applications that identify candidates, on-board employees, manage time and labor, administer payroll deductions and benefits, manage performance, terminate employees and administer post-termination health benefits, such as COBRA. The Company’s solution allows clients to analyze employee information to make business decisions. The Company’s HCM solution offers a range of applications, including talent acquisition, time and labor management, payroll, talent management and human resources (HR) management.

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