AkamaiPaycom

Akamai vs Paycom

This page compares Akamai and Paycom, examining business models, financial performance, and market context in a neutral, accessible way. It discusses how each company operates, where its revenue comes...

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Investment Analysis

Akamai

Akamai

AKAM

Pros

  • Akamai reported a 5% year-over-year revenue increase to $1.055 billion in Q3 2025, with strong margin outperformance and significant EPS growth.
  • Cloud Infrastructure Services revenue surged 39% year-over-year, reflecting momentum in high-growth security and cloud segments.
  • Launched Akamai Inference Cloud powered by NVIDIA AI infrastructure, positioning the company in innovative AI edge computing applications.

Considerations

  • Return on equity (ROE) at 9.07% is below industry leaders and long-term averages, indicating moderate profitability efficiency.
  • The transition from legacy CDN to cloud and security services involves execution risk amid competitive market dynamics.
  • Valuation metrics show a price-to-earnings ratio of 24.3x, which is above some tech peers, implying potential valuation headwinds.
Paycom

Paycom

PAYC

Pros

  • Paycom benefits from consistent growth in cloud-based payroll and HR software, addressing a large, expanding market.
  • Strong recurring revenue model with a high customer retention rate supports steady cash flow visibility and business stability.
  • Continued innovation and product enhancements position Paycom well to capitalize on digitisation trends in workforce management.

Considerations

  • High valuation multiples compared to industry norms could limit upside potential and raise risk in a market correction.
  • Exposure to competitive pressure from larger software providers and shifting technology demands poses ongoing risks.
  • Reliance on US market concentration may limit diversification benefits and increase sensitivity to domestic economic cycles.

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