Critical Review: Paylocity Holding Corporation (PCTY) versus Bottomline Technologies (EPAY)
Paylocity Holding Corporation (NASDAQ: PCTY) and Bottomline Technologies (NASDAQ:EPAY) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.
Risk and Volatility
Paylocity Holding Corporation has a beta of 2.26, suggesting that its stock price is 126% more volatile than the S&P 500. Comparatively, Bottomline Technologies has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Paylocity Holding Corporation and Bottomline Technologies, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Paylocity Holding Corporation||0||6||8||0||2.57|
Paylocity Holding Corporation currently has a consensus target price of $51.00, indicating a potential upside of 10.41%. Bottomline Technologies has a consensus target price of $30.50, indicating a potential upside of 4.02%. Given Paylocity Holding Corporation’s higher possible upside, research analysts plainly believe Paylocity Holding Corporation is more favorable than Bottomline Technologies.
Earnings & Valuation
This table compares Paylocity Holding Corporation and Bottomline Technologies’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Paylocity Holding Corporation||$300.01 million||7.97||$28.32 million||$0.12||384.92|
|Bottomline Technologies||$349.41 million||3.16||$28.08 million||($0.87)||-33.70|
Paylocity Holding Corporation has higher revenue, but lower earnings than Bottomline Technologies. Bottomline Technologies is trading at a lower price-to-earnings ratio than Paylocity Holding Corporation, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
63.0% of Paylocity Holding Corporation shares are owned by institutional investors. Comparatively, 92.5% of Bottomline Technologies shares are owned by institutional investors. 53.1% of Paylocity Holding Corporation shares are owned by insiders. Comparatively, 3.2% of Bottomline Technologies 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.
This table compares Paylocity Holding Corporation and Bottomline Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Paylocity Holding Corporation||2.24%||6.33%||0.70%|
Paylocity Holding Corporation beats Bottomline Technologies on 9 of the 13 factors compared between the two stocks.
About Paylocity Holding Corporation
Paylocity Holding Corporation is a cloud-based provider of payroll and human capital management (HCM), software solutions for medium-sized organizations. The Company’s services are provided in a software-as-a-service delivery model utilizing its cloud-based platform. The cloud-based platform provides a suite of applications using a multi-tenant architecture. The cloud-based platform features a suite of unified payroll and HCM applications. The Company, through cloud-based platform, offers various products, which include Paylocity Web Pay, Paylocity HR, Paylocity Affordable Care Act Enhanced, Paylocity Impressions, Performance Management, Self-Service HR Portals, Paylocity Recruiting, Paylocity Web Time, Paylocity Web Onboarding, and Paylocity Web Benefits and Paylocity Enterprise Benefits, Powered by bswift. The multi-tenant software platform is configurable and includes a unified suite of payroll and HCM applications, such as time and labor tracking, benefits and talent management.
About Bottomline Technologies
Bottomline Technologies (de), Inc. is engaged in providing a set of cloud-based business payment, digital banking, fraud prevention, payment and financial document solutions. The Company helps businesses pay and get paid. It offers hosted or Software as a Service (SaaS) solutions, as well as software designed to run on-site at the customer’s location. It operates through four segments: Payments and Transactional Documents, Hosted Solutions, Digital Banking and Other. The Payments and Transactional Documents segment is a supplier of software products that provide a range of financial business process management solutions, including making and collecting payments and generating and storing business documents. The Hosted Solutions segment provides customers with SaaS technology offerings. The Digital Banking segment provides solutions to banking and financial institution customers. The Other segment consists of its healthcare and cyber fraud and risk management operating segments.
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