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 $39.4B against $28.7B — 1.4× the size. Zoom Communications, Inc. trades at the lower P/E: 8.5× against 22.1×. 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 22.11 8.51 25.41
P/S 6.02 5.51 2.73
P/B 10.72 2.43 2.57
Price to free cash flow 19.69 14.29 17.58
EV/EBITDA 13.33 12.93 15.36
EV/Sales 6.62 4.06 2.59
Earnings yield 4.52% 11.75% 0.00%
Free cash flow yield 5.08% 7.00% 2.24%

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% 5.01%
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% 12.48%
EPS growth (last fiscal year) 6.77% 92.52% 32.26%
Revenue growth, 5-year CAGR 9.93% 12.92% 14.21%
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 1.52
Net debt to EBITDA 1.06 (5.08) 0.08

Dividend

Metric PAYX ZM Software Application median
Dividend yield 4.07% — 0.95%
Payout ratio 0.90 — 0.29

Size

Metric PAYX ZM Software Application median
Market cap 39.44b 28.74b 357.77m

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