Paycom Software (NYSE:PAYC) & MongoDB (NASDAQ:MDB) Critical Review

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

Institutional & Insider Ownership

89.3% of MongoDB shares are held by institutional investors. Comparatively, 87.8% of Paycom Software shares are held by institutional investors. 2.6% of MongoDB shares are held by company insiders. Comparatively, 13.2% of Paycom Software shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MongoDB	2.12%	1.06%	0.84%
Paycom Software	23.28%	47.97%	8.48%

Volatility & Risk

MongoDB has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500. Comparatively, Paycom Software has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MongoDB	0	7	30	2	2.87
Paycom Software	1	12	4	0	2.18

MongoDB currently has a consensus price target of $460.59, suggesting a potential upside of 42.78%. Paycom Software has a consensus price target of $255.36, suggesting a potential upside of 8.55%. Given MongoDB’s stronger consensus rating and higher probable upside, analysts plainly believe MongoDB is more favorable than Paycom Software.

Earnings & Valuation

This table compares MongoDB and Paycom Software”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MongoDB	$2.46 billion	10.55	-$71.15 million	$0.71	454.35
Paycom Software	$2.05 billion	5.17	$453.40 million	$10.44	22.53

Paycom Software has lower revenue, but higher earnings than MongoDB. Paycom Software is trading at a lower price-to-earnings ratio than MongoDB, indicating that it is currently the more affordable of the two stocks.

Summary

MongoDB beats Paycom Software on 9 of the 15 factors compared between the two stocks.

About MongoDB

MongoDB, Inc. develops database software and related services for businesses and developers. Its core product, MongoDB, is a document database designed to store and manage data in a flexible format for applications across a range of industries and use cases. The company offers MongoDB Atlas, a managed cloud database service available across major cloud platforms, as well as software that customers can deploy in their own environments. MongoDB also provides tools and services for application development, database management, security, and data operations.

About Paycom Software

Paycom Software, Inc. provides cloud-based human capital management (HCM) software that helps employers manage payroll and related workforce processes through a unified platform. Its services support organizations throughout the employee life cycle, from hiring and onboarding to payroll, benefits administration, time and labor management, and talent management. The company’s platform includes employee self-service tools and Beti, a feature that enables employees to review and complete their own payroll.