Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad R. Richison has sold a portion of his holdings in the company, according to a recent filing with the Securities and Exchange Commission. The transactions, which took place on June 26, 2024, involved the sale of Paycom common stock totaling over $547,000.
Richison executed multiple sales at prices ranging from $140.32 to $142.06 per share. The exact number of shares sold at each price point within this range was not disclosed in the filing. However, the filing provided a weighted average price for the shares sold, indicating that the transactions were made in varying quantities across the specified price range.
Following these transactions, Richison's direct ownership in Paycom remains substantial, with over 3 million shares held. Additionally, shares owned indirectly through entities such as Ernest Group, Inc., for which Richison serves as the sole director, were also reported in the filing. Ernest Group is owned by Richison and certain trusts for his children, suggesting a significant level of control over a large number of Paycom shares.
The filing also mentioned holdings in various trusts, including those set up for Richison's grandchildren and children, indicating a complex structure of indirect ownership. These trusts hold shares of Paycom and are part of the broader ownership picture for Richison.
Investors often monitor insider transactions as they provide insights into executives' perspectives on the company's stock value. While the reasons for Richison's sales are not detailed in the filing, the disclosed transactions are part of a planned trading arrangement known as a Rule 10b5-1 trading plan, which was adopted jointly by Richison and Ernest Group on February 16, 2024.
Paycom, headquartered in Oklahoma City, specializes in providing cloud-based human capital management software solutions and is recognized within the prepackaged software industry. The company's stock is publicly traded and is followed by investors who are interested in the technology sector, particularly software services.
For more detailed information regarding the individual transactions and the specific number of shares sold at each price within the reported range, the filing notes that Richison is prepared to furnish full details to Paycom Software, Inc., its security holders, or the SEC staff upon request.
In other recent news, Paycom Software has seen significant changes in its financial outlook and leadership structure. Following its first-quarter results, the company reported an 11% increase in revenue year-over-year, reaching $500 million. Net income and adjusted EBITDA surpassed 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.
Several analyst adjustments followed these developments. TD Cowen lowered its stock price target to $170, citing a cautious approach to the company's strategic initiatives. BMO Capital maintained its Market Perform rating post the co-CEO's resignation, citing challenges due to macroeconomic pressures and strategic focus areas. Mizuho also reduced 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 macroeconomic headwinds.
In addition to financial updates, Paycom has undergone major leadership changes, including the appointment of a new COO, 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 provide a snapshot of the evolving landscape at Paycom Software.
InvestingPro Insights
As Paycom Software's (NYSE:PAYC) CEO Chad R. Richison alters his stake in the company, investors and market observers may be seeking context to understand the stock's current performance and future potential. Paycom, a prominent player in the cloud-based human capital management software solutions market, shows a mix of financial strengths and market challenges according to InvestingPro data.
InvestingPro Tips highlight that Paycom holds more cash than debt on its balance sheet and boasts impressive gross profit margins, which are reflected in the company's robust gross profit margin of 86.55% for the last twelve months as of Q1 2024. Additionally, the company's management has been actively buying back shares, a sign that could be interpreted as confidence in the company's valuation and prospects. For investors looking for more in-depth analysis and additional tips, there are 13 more InvestingPro Tips available for Paycom at InvestingPro's website. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
The company's market capitalization stands at $8.03 billion, with a Price/Earnings (P/E) ratio of 17.4, which is considered low relative to near-term earnings growth. This is further supported by a Price/Earnings (P/E) ratio adjusted for the last twelve months as of Q1 2024, which is slightly lower at 17.11. The Price to Earnings Growth (PEG) ratio for the same period is notably low at 0.32, suggesting that the stock may be undervalued based on its earnings growth rate.
Despite recent pressures, indicated by a 6-month price total return of -31.16% and trading near its 52-week low, the company has maintained a steady revenue growth of 18.23% over the last twelve months as of Q1 2024. Analysts predict the company will be profitable this year, which is consistent with its profitability over the past twelve months.
These metrics and insights provide a snapshot of Paycom's financial health and market position, offering valuable information for investors and analysts monitoring the company's stock in the wake of insider transactions.
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