Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad R. Richison has recently sold a total of 3,900 shares of the company's common stock, according to a new SEC filing. The transactions, which took place on July 9, 2024, resulted in proceeds of over $546,741 for Richison, with the shares being sold at an average price of $140.19 each.
The sales were conducted in multiple transactions at prices ranging from $139.91 to $140.75, as detailed in the SEC filing. This range indicates a slight fluctuation in the selling price per share during the course of the trades. It is important to note that the sales reported were executed pursuant to a pre-arranged trading plan adopted by Richison and Ernest Group, Inc. on February 16, 2024.
Following the sale, Richison's direct ownership in Paycom Software stands at 3,025,658 shares. Additionally, he holds an indirect stake through Ernest Group, Inc., which is wholly owned by Richison and certain trusts for his children. Richison, being the sole director of Ernest Group, may be deemed to beneficially own the shares held by the company.
The SEC document also mentions various trusts for the benefit of Richison's family members, indicating that Richison has a broader indirect interest in the company's stock through these entities. These trusts 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.
The filing was signed by Matthew Paque, attorney-in-fact, on July 10, 2024, confirming the transactions detailed in the report.
Investors and followers of Paycom Software, Inc. often monitor the trading activity of company insiders like Richison for insights into the company's performance and the confidence level of its leaders. Insider transactions are routinely disclosed to the public through SEC filings and provide a transparent view of how executives are managing their stock in the company.
In other recent news, Paycom Software 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 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. Amid these financial developments, Paycom has also undergone significant changes in its leadership structure, including the appointment of a new COO, Randy Peck, who brings over 34 years of experience in payroll and human capital management. Other promotions within the company include Matt Paque to Chief Legal Officer and Jennifer Kraszewski to Chief Human Resources Officer.
Several analyst adjustments have followed these developments. TD Cowen reduced its price target for Paycom Software to $147, retaining a Hold rating on the stock, citing a cautious approach to the company's strategic initiatives. Similarly, Mizuho cut its price target on Paycom shares to $170, maintaining a neutral stance, due to challenges such as the cannibalization of its Beti product and potential macroeconomic headwinds. BMO Capital also maintained its Market Perform rating following the co-CEO's resignation, citing challenges due to macroeconomic pressures and strategic focus areas. These recent developments provide valuable insights for investors monitoring Paycom's performance and strategic direction.
InvestingPro Insights
As Paycom Software's CEO, Chad R. Richison, adjusts his stake in the company, investors may find it valuable to consider several metrics and insights from InvestingPro. With a current market capitalization of approximately $7.93 billion, Paycom Software is navigating the market with notable financial strengths. An important highlight is the company's gross profit margin, which stands at an impressive 86.55% over the last twelve months as of Q1 2024. This indicates a robust ability to control costs and maintain profitability.
Despite recent insider sales, Paycom Software exhibits strong financial health, holding more cash than debt on its balance sheet, as noted in one of the InvestingPro Tips. This places the company in a favorable position to manage its financial obligations and invest in growth opportunities. Additionally, the company's P/E ratio is currently 17.17, coupled with a PEG ratio of 0.32, suggesting that the stock may be undervalued relative to its earnings growth potential.
Investors should also be aware that Paycom's stock is trading near its 52-week low, and the RSI suggests it is in oversold territory. These factors may indicate a potential buying opportunity for those who believe in the company's long-term value proposition. For a deeper dive into Paycom's financials and to access more InvestingPro Tips, including insights into share buybacks and near-term earnings growth, visit https://www.investing.com/pro/PAYC. There are 13 additional tips available, providing a comprehensive analysis for informed investment decisions. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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