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

Institutional and Insider Ownership

86.4% of Paycom Software shares are owned by institutional investors. Comparatively, 60.4% of shares of all “Enterprise Software” companies are owned by institutional investors. 17.9% of Paycom Software shares are owned by company insiders. Comparatively, 22.5% of shares of all “Enterprise Software” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Paycom Software and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paycom Software 0 5 10 0 2.67
Paycom Software Competitors 354 2083 3957 109 2.59

Paycom Software currently has a consensus target price of $80.07, indicating a potential downside of 2.60%. As a group, “Enterprise Software” companies have a potential downside of 0.06%. Given Paycom Software’s competitors higher possible upside, analysts plainly believe Paycom Software has less favorable growth aspects than its competitors.

Profitability

This table compares Paycom Software and its competitors’ 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 -25.59% -225.24% -8.30%

Risk and Volatility

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 competitors have a beta of 1.13, suggesting that their average share price is 13% more volatile than the S&P 500.

Earnings & Valuation

This table compares Paycom Software and its competitors revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Paycom Software $382.87 million $73.92 million 88.39
Paycom Software Competitors $1.27 billion $348.12 million 34.50

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

Summary

Paycom Software beats its competitors 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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