Analyzing 8X8 (NASDAQ:EGHT) & Paycom Software (NYSE:PAYC)

Paycom Software (NYSE:PAYC) and 8X8 (NASDAQ:EGHT) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations for Paycom Software and 8X8, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paycom Software	0	8	5	1	2.50
8X8	1	1	1	0	2.00

Paycom Software presently has a consensus target price of $159.75, suggesting a potential upside of 10.87%. 8X8 has a consensus target price of $2.45, suggesting a potential upside of 29.63%. Given 8X8’s higher probable upside, analysts plainly believe 8X8 is more favorable than Paycom Software.

Profitability

This table compares Paycom Software and 8X8’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paycom Software	22.44%	28.34%	8.29%
8X8	0.22%	25.77%	5.30%

Earnings and Valuation

This table compares Paycom Software and 8X8″s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paycom Software	$2.05 billion	3.34	$453.40 million	$8.65	16.66
8X8	$735.75 million	0.36	$1.65 million	$0.02	94.50

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.

Risk and Volatility

Paycom Software has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, 8X8 has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500.

Institutional & Insider Ownership

87.8% of Paycom Software shares are owned by institutional investors. Comparatively, 94.0% of 8X8 shares are owned by institutional investors. 13.2% of Paycom Software shares are owned by insiders. Comparatively, 2.1% of 8X8 shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Paycom Software beats 8X8 on 11 of the 15 factors compared between the two stocks.

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.

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.