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Paychex, Inc. (PAYX) vs Unity Software Inc. (U)

Paychex, Inc. and Unity Software Inc. are both Software Application companies. Paychex, Inc. is the larger, with a market value of $37.2B against $20.2B — 1.8× the size. Unity Software Inc. has negative trailing earnings, so its P/E is not meaningful; Paychex, Inc. trades at 20.6×. Unity Software Inc. grew revenue faster over the last twelve months: 14.0% against 14.0%. Paychex, Inc. has the higher net margin (27.4% vs −29.0%) and the higher return on invested capital (22.2% vs −13.2%). Across the 20 metrics below, Paychex, Inc. leads on 13 and Unity Software Inc. on 7.

Valuation

Metric PAYX U Software Application median
P/E 20.59 n/m 24.69
P/S 5.60 10.12 2.74
P/B 9.98 6.75 2.83
Price to free cash flow 18.34 39.26 17.55
EV/EBITDA 12.50 n/m 14.66
EV/Sales 6.20 10.06 2.65
Earnings yield 4.86% (2.90%) 0.00%
Free cash flow yield 5.45% 2.55% 1.87%

Profitability

Metric PAYX U Software Application median
Gross margin 74.39% 64.85% 67.03%
Operating margin 39.19% (30.37%) 0.00%
Net margin 27.35% (28.97%) 0.00%
Free cash flow margin 30.54% 26.54% 5.01%
Return on equity 47.06% (18.85%) 0.00%
Return on assets 11.17% (8.78%) 0.00%
Return on invested capital 22.23% (13.16%) 0.00%

Growth

Metric PAYX U Software Application median
Revenue growth (TTM) 13.97% 13.98% 12.48%
EPS growth (last fiscal year) 6.77% 42.86% 32.26%
Revenue growth, 5-year CAGR 9.93% 19.08% 14.21%
Net income growth, 5-year CAGR 9.91% 0.00% 0.00%

Health

Metric PAYX U Software Application median
Debt to equity 1.23 0.74 0.02
Current ratio 1.28 2.03 1.52
Net debt to EBITDA 1.06 (9.91) 0.06

Dividend

Metric PAYX U Software Application median
Dividend yield 4.37% — 0.86%
Payout ratio 0.90 — 0.29

Size

Metric PAYX U Software Application median
Market cap 37.19b 20.20b 379.49m

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