Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad R. Richison has sold a total of $624,439 worth of company stock, according to a recent SEC filing. The transactions were executed on July 17, 2024, with prices ranging from $157.36 to $161.7 per share.
The sales were conducted under a 10b5-1 trading plan, a tool that allows company insiders to set up a predetermined plan to sell stocks at a time when they are not in possession of material non-public information. This approach is often used to avoid any potential concerns about insider trading.
Richison's transactions included several separate sales at varying prices. The lowest price per share in the range was $157.36, with sales at the high end reaching $161.7 per share. The exact number of shares sold at each price within this range was not disclosed in the filing.
The SEC form indicates that following these transactions, Richison's direct holdings in Paycom stock have decreased, but he still maintains a significant number of shares directly and indirectly. The indirect holdings include shares owned by Ernest Group, Inc., which is directed by Richison and owned by him along with certain trusts for his children. Richison may be deemed to beneficially own these shares due to his relationship with the entity and his role as trustee for the trusts.
The filing also lists several trusts for the benefit of Richison's family members, which hold shares of Paycom stock. These include the Faye Penelope Richison 2023 Irrevocable Trust, Rome West Pedersen 2023 Irrevocable Trust, and others established for the benefit of Richison's grandchildren and children. Richison is the settlor and sole trustee of these trusts, indicating his continued indirect influence over a substantial portion of Paycom shares.
Investors often monitor the buying and selling activities of company executives as these can provide insights into their confidence in the company's future prospects. However, it is important to note that the use of 10b5-1 plans can mean that these transactions are planned well in advance and may not necessarily reflect the executive's current view or immediate market conditions.
Paycom Software, Inc., headquartered in Oklahoma City, specializes in providing comprehensive, cloud-based human capital management software to help businesses streamline their employment processes from recruitment to retirement.
In other recent news, Paycom Software has seen a flurry of activity in both financial and personnel developments. The company 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 strong 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.
Significant changes within the company's leadership structure have also occurred. Randy Peck, a veteran in payroll and human capital management, has been appointed as the new Chief Operating Officer. Additional promotions include Matt Paque to Chief Legal Officer and Jennifer Kraszewski to Chief Human Resources Officer.
Several analyst firms have revised their outlooks on Paycom. TD Cowen reduced its price target to $170, maintaining a Hold rating, due to a cautious approach to the company's strategic initiatives and a lower-than-anticipated revenue guidance for FY24. Similarly, Mizuho lowered its price target to $170, citing potential challenges such as the cannibalization of its Beti product and macroeconomic headwinds. BMO Capital, following the co-CEO's resignation, maintained its Market Perform rating, suggesting a neutral outlook due to macroeconomic pressures and strategic focus areas.
InvestingPro Insights
Following the recent stock sales by Paycom Software, Inc. (NYSE:PAYC) CEO Chad R. Richison, investors may find additional context in the company's financial metrics and market performance. According to InvestingPro data, Paycom currently holds a market capitalization of $8.76 billion, with a P/E ratio of 18.95, indicating a potentially attractive valuation in comparison to its earnings. Additionally, the company's PEG ratio, which stands at 0.37 for the last twelve months as of Q1 2024, suggests that Paycom's share price may be undervalued relative to its earnings growth.
InvestingPro Tips highlight several key aspects of Paycom's financial health and investment potential. Notably, the company holds more cash than debt on its balance sheet, demonstrating a solid financial position. Furthermore, Paycom boasts impressive gross profit margins, which reached 86.55% in the last twelve months as of Q1 2024. This high profitability level is a positive sign for investors, as it indicates efficient operations and strong pricing power.
While the stock price has seen a significant decline over the last year, with a 57.12% drop in the 1-year price total return, analysts predict the company will be profitable this year. This forecast, combined with the fact that Paycom has been profitable over the last twelve months, may offer reassurance to investors considering the company's long-term prospects.
For more in-depth analysis and additional InvestingPro Tips—there are 10 available for Paycom—interested readers can explore the full suite of insights at: https://www.investing.com/pro/PAYC. To gain access to these exclusive 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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