Paycom Software (NYSE:PAYC – Get Free Report) and Appian (NASDAQ:APPN – Get Free Report) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.
Valuation & Earnings
This table compares Paycom Software and Appian’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Paycom Software | $1.69 billion | 5.09 | $340.79 million | $8.21 | 18.08 |
| Appian | $545.36 million | 4.46 | -$111.44 million | ($1.47) | -22.88 |
Paycom Software has higher revenue and earnings than Appian. Appian is trading at a lower price-to-earnings ratio than Paycom Software, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Paycom Software and Appian’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Paycom Software | 26.91% | 32.84% | 10.93% |
| Appian | -19.20% | -204.82% | -16.12% |
Risk & Volatility
Paycom Software has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Appian has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations for Paycom Software and Appian, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Paycom Software | 0 | 16 | 3 | 0 | 2.16 |
| Appian | 1 | 2 | 5 | 0 | 2.50 |
Paycom Software presently has a consensus price target of $237.81, indicating a potential upside of 60.22%. Appian has a consensus price target of $46.43, indicating a potential upside of 38.02%. Given Paycom Software’s higher possible upside, research analysts clearly believe Paycom Software is more favorable than Appian.
Insider and Institutional Ownership
87.8% of Paycom Software shares are held by institutional investors. Comparatively, 52.7% of Appian shares are held by institutional investors. 14.5% of Paycom Software shares are held by insiders. Comparatively, 44.0% of Appian shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
Paycom Software beats Appian on 10 of the 14 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 Appian
Appian Corporation, a software company that provides low-code design platform in the United States, Mexico, Portugal, and internationally. The company’s platform offers artificial intelligence, process automation, data fabric, and process mining. It provides The Appian Platform, an integrated automation platform that enables organizations to design, automate, and optimize mission-critical business processes. The company also offers professional and customer support services. It serves to financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation industries. Appian Corporation was incorporated in 1999 and is headquartered in McLean, Virginia.
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