Paycom CEO sells over $636k in company stock
In a recent transaction, Chad R. Richison, the CEO, President, and Chairman of Paycom (NYSE:) Software, Inc. (NYSE:PAYC), sold a significant amount of company stock, totaling over $636,000. The sale occurred on July 26, 2024, and involved multiple transactions at varying prices.
The transactions were executed in a series of sales with prices ranging from $162.36 to $163.97 per share. Specifically, Richison sold 631 shares at an average price of $162.36, 1102 shares at an average price of $163.35, and 217 shares at an average price of $163.97. These sales were part of a prearranged trading plan adopted on February 16, 2024, which allows for planned trading of securities. The plan is in accordance with Rule 10b5-1, which provides company insiders the ability to set up a predetermined plan to sell stocks at a time when they are not in possession of material non-public information.
Following the sales, Richison still holds a substantial number of Paycom shares directly and indirectly through various family trusts. Notably, the Ernest Group, Inc., which is directed by Richison and owned by him and certain trusts for his children, still maintains a significant stake in Paycom Software.
The transactions were disclosed in a Form 4 filing with the Securities and Exchange Commission, detailing the sales and remaining holdings. Paycom Software, Inc., headquartered in Oklahoma City, operates in the prepackaged software industry and is known for its payroll and human resources technology solutions.
Investors often monitor insider sales as they can provide insights into an executive’s view of the company’s current valuation and future prospects. However, it’s important to note that insider sales can be motivated by various personal financial planning strategies and do not necessarily indicate a lack of confidence in the company’s future performance.
In other recent news, Paycom Software has been the focus of several analyst adjustments. TD Cowen revised its outlook on Paycom, reducing the price target to $147 from the previous $170, citing a cautious approach to the company’s strategic initiatives. Mizuho also lowered its price target on Paycom shares to $170, maintaining a neutral stance, due to potential challenges such as the cannibalization of its Beti product and potential macroeconomic headwinds. BMO Capital maintained its Market Perform rating post the co-CEO’s resignation, citing challenges due to macroeconomic pressures and strategic focus areas.
In terms of financial performance, Paycom reported an 11% increase in revenue year-over-year, reaching $500 million, with net income and adjusted EBITDA surpassing expectations at $247 million and nearly $230 million, respectively. Despite these robust results, Paycom maintained its full-year 2024 revenue and adjusted EBITDA guidance, projecting revenues between $1.860 billion and $1.885 billion, and adjusted EBITDA between $720 million and $730 million.
Paycom has also witnessed significant changes in its leadership structure, including the appointment of a new Chief Operating Officer, Randy Peck, who brings over 34 years of experience in payroll and human capital management. Other promotions include Matt Paque to Chief Legal Officer and Jennifer Kraszewski to Chief Human Resources Officer. These recent developments are part of Paycom’s strategic direction to navigate through the evolving market conditions.
InvestingPro Insights
Amidst the insider trading activity at Paycom Software, Inc. (NYSE:PAYC), investors are keen to understand the financial health and future prospects of the company. With Chad R. Richison’s recent stock sales, it’s valuable to consider Paycom’s current market position and performance metrics.
InvestingPro data highlights a robust financial profile for Paycom, with a market capitalization of $9.3 billion and a Price to Earnings (P/E) ratio of 20.15. This P/E ratio slightly adjusts to 19.79 when considering the last twelve months as of Q1 2024, suggesting the stock is trading at a reasonable valuation relative to its earnings. Moreover, the company’s revenue growth remains strong, with an 18.23% increase over the last twelve months as of Q1 2024, indicating a solid upward trajectory in earnings potential.
One of the key InvestingPro Tips for Paycom is its impressive gross profit margins, which stand at an exceptional 86.55% for the last twelve months as of Q1 2024. This figure reflects the company’s efficiency in managing its cost of goods sold and underscores its ability to retain a significant portion of revenue as profit. Additionally, Paycom is noted for holding more cash than debt on its balance sheet, which provides financial flexibility and may be a reassuring sign for investors concerned about the company’s liquidity.
Investors interested in a deeper dive into Paycom’s financials and future outlook can find additional insights and metrics on InvestingPro. Currently, there are nine more InvestingPro Tips available for Paycom, which can be accessed through the platform. For those looking to gain full access to these valuable insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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