Head-To-Head Analysis: Paycom Software (NYSE:PAYC) versus FalconStor Software (OTCMKTS:FALC)

Paycom Software (NYSE:PAYCGet Rating) and FalconStor Software (OTCMKTS:FALCGet Rating) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paycom Software 1 4 9 0 2.57
FalconStor Software 0 0 0 0 N/A

Paycom Software presently has a consensus price target of $384.29, suggesting a potential upside of 22.60%. Given Paycom Software’s higher probable upside, research analysts clearly believe Paycom Software is more favorable than FalconStor Software.

Volatility and Risk

Paycom Software has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, FalconStor Software has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500.

Institutional & Insider Ownership

88.6% of Paycom Software shares are owned by institutional investors. Comparatively, 2.5% of FalconStor Software shares are owned by institutional investors. 15.2% of Paycom Software shares are owned by insiders. Comparatively, 52.7% of FalconStor Software shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Paycom Software 19.40% 24.24% 5.71%
FalconStor Software -17.77% N/A -12.05%

Earnings and Valuation

This table compares Paycom Software and FalconStor Software’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Paycom Software $1.06 billion 17.82 $195.96 million $4.31 72.73
FalconStor Software $14.18 million 1.08 $200,000.00 ($0.48) -4.48

Paycom Software has higher revenue and earnings than FalconStor Software. FalconStor 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.

Summary

Paycom Software beats FalconStor Software on 11 of the 13 factors compared between the two stocks.

About Paycom Software

(Get Rating)

Paycom Software, Inc. engages in the provision of cloud-based human capital management (HCM) software solutions delivered as Software-as-a-Service. It offers functionality and data analytics that businesses need to manage the complete employment life cycle from recruitment to retirement. Its solutions include talent acquisition, time and labor management, payroll, talent management, and human resource management. The company was founded by Chad R. Richison in 1998 and is headquartered in Oklahoma City, OK.

About FalconStor Software

(Get Rating)

FalconStor Software, Inc., a storage software company, enables enterprise customers and managed service providers to secure, migrate, and protect their data worldwide. The company offers FalconStor Virtual Tape Library, a software that emulates and replaces cumbersome legacy physical tape libraries for archive related data preservation without being forced to replace their enterprise backup and archive software and associated processes; FalconStor StorSafe, a long-term archive data management software; FalconStor Continuous Data Protector delivers instant data availability, and reliable recovery; and FalconStor Network Storage Server for data storage virtualization and business continuity in heterogeneous environments. It also provides FalconStor StorSigh, a long-term archive and business continuity driven data replication from one centralized management point; FalconStor RecoverTrac Disaster Recovery Technology that streamlines the implementation, testing, and execution of disaster recovery operations; and FalconStor MicroScanTM Technology, which minimizes the amount of data transferred during replication by eliminating inefficiencies at the application and file system layer. The company sells its products through authorized partners, value-added resellers, solution providers, system integrators, direct market resellers, distributors, managed service providers, cloud service providers, and original equipment manufacturers, as well as directly to customers. FalconStor Software, Inc. was incorporated in 1994 and is headquartered in Austin, Texas.

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