Financial Review: Paychex (NASDAQ:PAYX) and Tuya (NYSE:TUYA)

Tuya (NYSE:TUYA) and Paychex (NASDAQ:PAYX) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Tuya and Paychex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tuya	0	1	1	0	2.50
Paychex	3	13	0	0	1.81

Tuya presently has a consensus target price of $3.49, suggesting a potential upside of 60.46%. Paychex has a consensus target price of $139.87, suggesting a potential upside of 27.19%. Given Tuya’s stronger consensus rating and higher probable upside, equities analysts plainly believe Tuya is more favorable than Paychex.

Profitability

This table compares Tuya and Paychex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tuya	9.11%	2.93%	2.64%
Paychex	27.85%	45.17%	13.25%

Volatility & Risk

Tuya has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Paychex has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Institutional & Insider Ownership

11.5% of Tuya shares are owned by institutional investors. Comparatively, 83.5% of Paychex shares are owned by institutional investors. 2.1% of Tuya shares are owned by company insiders. Comparatively, 0.8% of Paychex shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Tuya and Paychex”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tuya	$298.62 million	3.94	$5.00 million	$0.05	43.50
Paychex	$5.79 billion	6.83	$1.66 billion	$4.45	24.71

Paychex has higher revenue and earnings than Tuya. Paychex is trading at a lower price-to-earnings ratio than Tuya, indicating that it is currently the more affordable of the two stocks.

Summary

Paychex beats Tuya on 9 of the 14 factors compared between the two stocks.

About Tuya

Tuya Inc. offers purpose-built Internet of Things (IoT) cloud development platform in the People's Republic of China and internationally. The company provides platform-as-a-service that enables business, original equipment manufacturers, brands, and developers to develop, launch, manage, and monetize software-enabled smart devices and services; and industry software-as-a-service, which enables businesses to deploy, connect, and manage various types of smart devices. It also offers cloud-based software value-added services that provides end users with smart features, such as cloud storage; and Cube Smart Private Cloud Solution which enables conglomerates to build their own autonomous and controllable IoT platforms; and could-based services to businesses, developers, and end users to develop and manage IoT experiences. In addition, the company provides smart solutions for IoT devices that integrates software capabilities; and enables developers to activate an IoT ecosystem of brands, OEMs, partners, and end users to engage and communicate through a range of smart devices, as well as sells finished smart devices. It offers its solutions to smart home, smart business, renewable energy, education, agriculture, outdoors and sport, and entertainment industries. The company was incorporated in 2014 and is based in Hangzhou, the People's Republic of China.

About Paychex

Paychex, Inc., together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing. The company also provides HR solutions, including integrated HCM technology solutions and HR advisory services through both virtual and on-site availability of a professionally trained HR representative, as well as HR support to non-payroll clients through its HR Partner Plus solution; and retirement services administration, such as plan implementation, ongoing compliance with government regulations, employee and employer reporting, participant and employer online access, electronic funds transfer, and other administrative services. In addition, it offers cloud-based HR administration software products for employee benefits management and administration, time and attendance, digital communication solutions, recruiting, and onboarding solutions; plan administration outsourcing and state unemployment insurance services; various business services to small to medium-sized businesses comprising payroll funding and outsourcing services, which include payroll processing, invoicing, and tax preparation; and payment processing services, financial fitness programs, and a small-business loan resource center. Further, the company provides insurance services for property and casualty coverage, such as workers’ compensation, business-owner policies, cyber security protection, and commercial auto, as well as health and benefits coverage, including health, dental, vision, and life. It markets and sells its services primarily through its direct sales force. The company was founded in 1971 and is headquartered in Rochester, New York.