The shares of Paychex, Inc. (NASDAQ:PAYX) and QuinStreet, Inc. (NASDAQ:QNST) were among the active stocks of the last trading sessions. Paychex, Inc. (NASDAQ:PAYX) soared to 0.77% closing at the price of $65.49 whereas the shares of QuinStreet, Inc. (NASDAQ:QNST) declined -0.35% with the decrease of -0.06 points closing at the price of $17.23. Paychex, Inc. has currently increase 4.68% in its stock over the period of 6-months while its rival QuinStreet, Inc. added 36.85% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Paychex, Inc. (NASDAQ:PAYX) is 34.9% while the ROI of QuinStreet, Inc. (NASDAQ:QNST) is 10.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PAYX’s EBITDA Margin is 16.26 whereas QNST’s is 28.15.
Both the profitability ratios suggest a mixed sentiment for Paychex, Inc. (NASDAQ:PAYX) and QuinStreet, Inc. (NASDAQ:QNST).
EPS & Surprise Factor
Paychex, Inc. (NASDAQ:PAYX) reported $0.67/share EPS for the previous quarter where analysts were predicting an EPS to be $0.65/share Thus beating the analyst Estimates with a Surprise Factor of 3.1 Percent. While, QuinStreet, Inc. (NASDAQ:QNST) reported EPS of $0.14/share in the last quarter. The analysts projected EPS of $0.13/share depicting a Surprise of 7.7 Percent.
Taking a look at Earnings per Share, QuinStreet, Inc. tends to be beating the analyst estimates more than Paychex, Inc.. so QNST is more profitable than PAYX.
Technical Analysis of Paychex, Inc. & QuinStreet, Inc.
Moving average convergence divergence (MACD) shows that Paychex, Inc. (NASDAQ:PAYX) is on a PRICE RELATIVITY trend While QuinStreet, Inc. (NASDAQ:QNST) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Paychex, Inc. was in BEARISH territory and QuinStreet, Inc. was in BULLISH territory.
PAYX’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While QNST’s candle is BEARISH with HIGH.
EPS Growth Rate: PAYX’s 7.64% versus QNST’s 0%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Paychex, Inc. (NASDAQ:PAYX) is predicted at 7.64% while QuinStreet, Inc. (NASDAQ:QNST) stands at 0%. These numbers suggest that PAYX is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of PAYX stands at 1.2 while QNST is at 2 whereas the debt ratio of the prior is 0.02 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 3 for PAYX and 1.3 for QNST which means PAYX has Hold rating whereas QNST has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for PAYX is $75.13 which is 12.83% of its current price while QNST has price target of 18.7 which is 7.86% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
PAYX currently has price to earning P/E ratio of 27.95 whereas QNST has 44.87 while the forward P/E ratio for the prior stands at 21.24 and for the later it depicts the value of 20.22.
The price to Book P/B for PAYX is 9.85, Price to Sale is at 6.81 and for QNST these ratios stand at 5.52 and 1.97.