Paychex, Inc. (PAYX) vs Zoom Communications, Inc. (ZM)

Paychex, Inc. and Zoom Communications, Inc. are both Software Application companies. Paychex, Inc. is the larger, with a market value of $36.0B against $26.5B — 1.4× the size. Zoom Communications, Inc. trades at the lower P/E: 8.1× against 20.1×. Paychex, Inc. grew revenue faster over the last twelve months: 14.0% against 5.04%. Zoom Communications, Inc. has the higher net margin (65.2% vs 27.4%) and the lower return on invested capital (18.3% vs 22.2%). Across the 22 metrics below, Zoom Communications, Inc. leads on 18 and Paychex, Inc. on 4.

Valuation

Metric PAYX ZM Software Application median
P/E 20.08 8.12 24.79
P/S 5.46 5.26 2.67
P/B 9.73 2.32 3.01
Price to free cash flow 17.88 13.64 16.59
EV/EBITDA 12.53 12.13 14.40
EV/Sales 6.06 3.81 2.62
Earnings yield 4.98% 12.31% 0.00%
Free cash flow yield 5.59% 7.33% 1.91%

Profitability

Metric PAYX ZM Software Application median
Gross margin 74.39% 77.30% 67.03%
Operating margin 39.19% 23.73% 0.00%
Net margin 27.35% 65.19% 0.00%
Free cash flow margin 30.54% 38.55% 4.32%
Return on equity 47.06% 32.14% 0.00%
Return on assets 11.17% 26.43% 0.00%
Return on invested capital 22.23% 18.27% 0.00%

Growth

Metric PAYX ZM Software Application median
Revenue growth (TTM) 13.97% 5.04% 12.40%
EPS growth (last fiscal year) 6.77% 92.52% —
Revenue growth, 5-year CAGR 9.93% 12.92% 13.72%
Net income growth, 5-year CAGR 9.91% 23.12% 0.00%

Health

Metric PAYX ZM Software Application median
Debt to equity 1.23 0.00 0.02
Current ratio 1.28 3.83 1.55
Net debt to EBITDA 1.06 (5.08) 0.06

Dividend

Metric PAYX ZM Software Application median
Dividend yield 2.84% — 1.25%
Payout ratio 0.76 0.00 0.00

Size

Metric PAYX ZM Software Application median
Market cap 36.03b 26.49b 396.11m

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