Analyzing Cellebrite DI (NASDAQ:CLBT) & Paychex (NASDAQ:PAYX)

Paychex (NASDAQ:PAYX) and Cellebrite DI (NASDAQ:CLBT) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Institutional and Insider Ownership

83.5% of Paychex shares are held by institutional investors. Comparatively, 45.9% of Cellebrite DI shares are held by institutional investors. 0.8% of Paychex shares are held by company insiders. Comparatively, 5.7% of Cellebrite DI shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Paychex and Cellebrite DI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paychex	25.84%	48.52%	11.54%
Cellebrite DI	16.47%	20.43%	10.64%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Paychex and Cellebrite DI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paychex	4	12	1	1	1.94
Cellebrite DI	1	0	4	0	2.60

Paychex presently has a consensus target price of $108.81, suggesting a potential upside of 18.66%. Cellebrite DI has a consensus target price of $22.50, suggesting a potential upside of 60.71%. Given Cellebrite DI’s stronger consensus rating and higher possible upside, analysts plainly believe Cellebrite DI is more favorable than Paychex.

Earnings & Valuation

This table compares Paychex and Cellebrite DI”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paychex	$5.57 billion	5.90	$1.66 billion	$4.54	20.20
Cellebrite DI	$475.67 million	7.34	$78.33 million	$0.31	45.16

Paychex has higher revenue and earnings than Cellebrite DI. Paychex is trading at a lower price-to-earnings ratio than Cellebrite DI, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Paychex has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Cellebrite DI has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

Summary

Paychex beats Cellebrite DI on 8 of the 15 factors compared between the two stocks.

About Paychex

Paychex, Inc., together with its subsidiaries, provides integrated human capital management solutions (HCM) for payroll, benefits, human resources (HR), and insurance services for small to medium-sized businesses in the United States, Europe, and India. It offers payroll processing services; payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing. The company also provides HR solutions, including integrated HCM technology solutions and HR advisory services through both virtual and on-site availability of a professionally trained HR representative, as well as HR support to non-payroll clients through its HR Partner Plus solution; and retirement services administration, such as plan implementation, ongoing compliance with government regulations, employee and employer reporting, participant and employer online access, electronic funds transfer, and other administrative services. In addition, it offers cloud-based HR administration software products for employee benefits management and administration, time and attendance, digital communication solutions, recruiting, and onboarding solutions; plan administration outsourcing and state unemployment insurance services; various business services to small to medium-sized businesses comprising payroll funding and outsourcing services, which include payroll processing, invoicing, and tax preparation; and payment processing services, financial fitness programs, and a small-business loan resource center. Further, the company provides insurance services for property and casualty coverage, such as workers’ compensation, business-owner policies, cyber security protection, and commercial auto, as well as health and benefits coverage, including health, dental, vision, and life. It markets and sells its services primarily through its direct sales force. The company was founded in 1971 and is headquartered in Rochester, New York.

About Cellebrite DI

Cellebrite DI Ltd. develops solutions for legally sanctioned investigations in Europe, the Middle East, Africa, the Americas, and the Asia-Pacific. The company's DI suite of solutions allows users to collect, review, analyze, and manage digital data across the investigative lifecycle with respect to legally sanctioned investigations used in various cases, including child exploitation, homicide, anti-terror, border control, sexual crimes, human trafficking, corporate security, cryptocurrency, and intellectual property theft. It provides Inseyets, a digital forensics software that collects and reviews digital evidence from various digital sources when conducting legally sanctioned investigations. The company's digital forensics software also offers data extraction, decoding capabilities, workflows, and automation capabilities. In addition, it provides Cellebrite Pathfinder, which reduces the time spent manually reviewing digital evidence by automating data analysis and visualization; Smart Search, an open source intelligence tool that automates the collection and review of publicly available online data; and Guardian, a case and evidence management solution. Further, the company offers digital forensic software for enterprises and service providers, including Inseyets for Enterprise, Endpoint Inspector, and Mobile Now; and professional services, such as training and certification services, and other services. It serves federal and state and local agencies. The company was incorporated in 1999 and is headquartered in Petah Tikva, Israel.