Critical Analysis: Paycom Software (NYSE:PAYC) vs. Rubrik (NYSE:RBRK)

Rubrik (NYSE:RBRK) and Paycom Software (NYSE:PAYC) are both large-cap technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

49.5% of Rubrik shares are held by institutional investors. Comparatively, 87.8% of Paycom Software shares are held by institutional investors. 13.7% of Rubrik shares are held by insiders. Comparatively, 13.2% of Paycom Software shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Rubrik and Paycom Software, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rubrik	1	0	28	0	2.93
Paycom Software	0	9	5	1	2.47

Rubrik presently has a consensus target price of $113.31, indicating a potential upside of 6.40%. Paycom Software has a consensus target price of $214.23, indicating a potential downside of 5.34%. Given Rubrik’s stronger consensus rating and higher probable upside, equities analysts plainly believe Rubrik is more favorable than Paycom Software.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rubrik	-16.50%	N/A	-8.45%
Paycom Software	22.78%	37.06%	8.17%

Volatility and Risk

Rubrik has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Paycom Software has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rubrik	$1.32 billion	16.77	-$348.83 million	($1.26)	-84.52
Paycom Software	$2.05 billion	4.97	$453.40 million	$9.41	24.05

Paycom Software has higher revenue and earnings than Rubrik. Rubrik 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 Rubrik on 9 of the 15 factors compared between the two stocks.

About Rubrik

Rubrik, Inc. provides data security solutions to individuals and businesses worldwide. The company offers enterprise data protection, unstructured data protection, cloud data protection, and SaaS data protection solutions; data threat analytics; data security posture; and cyber recovery solutions. It serves financial, retail, trade, transportation, energy, industrial, healthcare and life science, education, technology, media, communications, and public sectors. Rubrik, Inc. was formerly known as Scaledata, Inc. and changed its name to Rubrik, Inc. in October 2014. The company was incorporated in 2013 and is based in Palo Alto, California.

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.