8X8 (NASDAQ:EGHT – Get Free Report) and Paycom Software (NYSE:PAYC – Get Free Report) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.
Risk and Volatility
8X8 has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500. Comparatively, Paycom Software has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.
Valuation & Earnings
This table compares 8X8 and Paycom Software”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| 8X8 | $735.75 million | 0.36 | $1.65 million | $0.02 | 94.00 |
| Paycom Software | $2.05 billion | 3.45 | $453.40 million | $8.65 | 17.16 |
Paycom Software has higher revenue and earnings than 8X8. Paycom Software is trading at a lower price-to-earnings ratio than 8X8, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings for 8X8 and Paycom Software, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| 8X8 | 1 | 1 | 1 | 0 | 2.00 |
| Paycom Software | 0 | 8 | 5 | 1 | 2.50 |
8X8 currently has a consensus price target of $2.45, indicating a potential upside of 30.32%. Paycom Software has a consensus price target of $159.25, indicating a potential upside of 7.28%. Given 8X8’s higher possible upside, analysts plainly believe 8X8 is more favorable than Paycom Software.
Insider and Institutional Ownership
94.0% of 8X8 shares are held by institutional investors. Comparatively, 87.8% of Paycom Software shares are held by institutional investors. 2.1% of 8X8 shares are held by insiders. Comparatively, 13.2% of Paycom Software shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares 8X8 and Paycom Software’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| 8X8 | 0.22% | 25.77% | 5.30% |
| Paycom Software | 22.44% | 28.34% | 8.29% |
Summary
Paycom Software beats 8X8 on 11 of the 15 factors compared between the two stocks.
About 8X8
8×8, Inc. engages in the provision of enterprise communication solutions. It offers solutions to the business services, education, financial services, government, healthcare, and manufacturing industries. The company was founded in February 1987 and is headquartered in Campbell, CA.
About Paycom Software
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, time-off requests, labor allocation, labor management reports/push reporting, geofencing/geotracking, and Microfence, a proprietary Bluetooth. Its HCM solution also offers payroll applications comprising better employee transaction interface, payroll and tax management, payroll card, Everyday, Paycom pay, Client Action Center, expense management, mileage tracker/fixed and variable rates, garnishment administration, and GL concierge applications; and talent management applications that include employee self-service, compensation budgeting, performance management, position management, and Paycom learning, as well as my analytics. 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; benefit enrollment service; COBRA administration; personnel action and performance discussion forms; surveys; 401(k) reporting; report center; and affordable care act applications, as well as Clue, which securely collects, tracks, and manages the vaccination and testing data of the workforce. Paycom Software, Inc. was founded in 1998 and is based in Oklahoma City, Oklahoma.
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