Analyzing Paycom Software (NYSE:PAYC) and Coupa Software (NASDAQ:COUP)

Paycom Software (NYSE:PAYCGet Rating) and Coupa Software (NASDAQ:COUPGet Rating) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Paycom Software and Coupa Software, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paycom Software 0 5 8 0 2.62
Coupa Software 1 9 9 0 2.42

Paycom Software presently has a consensus target price of $375.43, indicating a potential upside of 1.46%. Coupa Software has a consensus target price of $92.88, indicating a potential upside of 21.41%. Given Coupa Software’s higher possible upside, analysts plainly believe Coupa Software is more favorable than Paycom Software.

Profitability

This table compares Paycom Software and Coupa Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Paycom Software 18.85% 23.38% 4.90%
Coupa Software -47.72% -17.87% -4.44%

Volatility & Risk

Paycom Software has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, Coupa Software has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.

Earnings and Valuation

This table compares Paycom Software and Coupa Software’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Paycom Software $1.06 billion 21.12 $195.96 million $3.93 94.15
Coupa Software $725.29 million 7.97 -$379.04 million ($4.84) -15.81

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

Institutional & Insider Ownership

87.1% of Paycom Software shares are owned by institutional investors. Comparatively, 95.5% of Coupa Software shares are owned by institutional investors. 15.2% of Paycom Software shares are owned by company insiders. Comparatively, 2.2% of Coupa Software shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Paycom Software beats Coupa Software on 11 of the 14 factors compared between the two stocks.

About Paycom Software

(Get Rating)

Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States. It offers functionality and data analytics that businesses need to manage the employment life cycle from recruitment to retirement. The company's HCM solution provides a suite of applications in the areas of talent acquisition, including applicant tracking, candidate tracker, background checks, on-boarding, e-verify, and tax credit services; and time and labor management, such as time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, labor management reports/push reporting, and geofencing/geotracking, and Microfence, a proprietary Bluetooth. Its HCM solution also offers payroll applications comprising better employee transaction interface, payroll and tax management, Paycom pay, expense management, mileage tracker/fixed and variable rates, garnishment management, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, and Paycom learning and content subscriptions, as well as my analytics, which offer employment predictor reporting. In addition, its HCM solution provides manager on-the-go that gives supervisors and managers the ability to perform a variety of tasks, such as approving time-off requests and expense reimbursements; direct data exchange; ask here, a tool for direct line of communication to ask work-related questions; document and checklist; government and compliance; benefits administration/benefits to carrier; COBRA administration; personnel action and performance discussion forms; surveys; and affordable care act applications, as well as Clue, which securely collect, track, and manage the vaccination and testing data of the workforce. Paycom Software, Inc. was founded in 1998 and is headquartered in Oklahoma City, Oklahoma.

About Coupa Software

(Get Rating)

Coupa Software Incorporated provides cloud-based business spend management platform that connects its customers with suppliers worldwide. The company provides visibility into and control over how companies spend money, optimize supply chains, and manage liquidity, as well as enables businesses to achieve savings that drive profitability. Its platform offers procurement, invoicing, expense management, and payment solutions that form the transactional engine for managing a company's business spend; and specialized solutions, including strategic sourcing, contract management, contingent workforce, supplier risk management, supply chain design and planning, treasury management, and spend analysis. It serves businesses in various industries, including healthcare and pharmaceuticals, retail, financial services, manufacturing, and technology. The company markets its platform primarily through a direct sales force. Coupa Software Incorporated was incorporated in 2006 and is headquartered in San Mateo, California.

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