Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad R. Richison has sold a portion of his company stock, according to a recent SEC filing. The transactions, which took place on August 9, 2024, involved the sale of Paycom common stock totaling over $617,000.
The executive sold shares in multiple transactions at prices ranging from $158.14 to $158.87. Specifically, the sales were conducted at weighted average prices, with some shares sold at prices from $157.70 to $158.65 and others from $158.73 to $158.99. These price ranges were determined by calculating the weighted average based on the different prices at which the shares were sold.
The SEC filing revealed that Richison sold 1,600 shares at an average price of $158.14 and another 350 shares at an average price of $158.87. Following these transactions, Richison's direct holdings in Paycom decreased, although he still retains a significant number of shares in the company.
The filing also noted that the sales were made pursuant to a joint Rule 10b5-1 trading plan, which was adopted by Richison and Ernest Group, Inc. on February 16, 2024. Rule 10b5-1 plans allow insiders of publicly traded corporations to set up a trading plan for selling stocks they own.
Investors often monitor insider sales as they can provide indications of an executive’s view on the company's current valuation or future prospects. However, such sales can also be part of regular portfolio management or personal financial planning.
Paycom, headquartered in Oklahoma City, specializes in providing cloud-based human capital management software solutions and has been a strong performer in the services-prepackaged software industry.
The transactions were disclosed to the SEC in a Form 4 filing, which is used by officers, directors, and significant shareholders to report their trading activities in company stock.
In other recent news, Paycom Software has been demonstrating steady growth and a focus on automation. The company reported a 9% increase in Q2 2024 revenue, reaching $438 million, with a GAAP net income of $68 million and adjusted EBITDA nearing $160 million. However, despite these robust results, Paycom has revised its FY24 revenue guidance downward by 40 basis points, introducing some uncertainty.
Analysts from TD Cowen and BMO Capital have maintained their Hold and Market Perform ratings on Paycom, respectively, but have increased their price targets. TD Cowen raised the shares target from $147.00 to $171.00, while BMO Capital increased its price target to $183. These adjustments follow the company's recent financial performance and strategic actions, including a substantial $1.5 billion share repurchase program.
In line with its financial strategy, Paycom has also announced a significant expansion of its share buyback program, which is expected to have a stabilizing effect on its stock. This move aligns with a broader pattern of share buybacks among Human Capital Management (HCM) payroll peers. Amid these developments, Paycom continues to maintain a robust financial position, even with the upcoming retirement of CFO Craig Boelte.
InvestingPro Insights
Paycom Software, Inc. (NYSE:PAYC) has been a topic of interest for investors, especially following the recent insider stock sale by CEO Chad R. Richison. To provide a broader perspective on the company's financial health and market performance, here are some key insights based on current InvestingPro data and tips.
InvestingPro Data indicates that Paycom has a market capitalization of approximately $8.61 billion, with a Price/Earnings (P/E) ratio of 18.68, which slightly adjusts to 18.21 when looking at the last twelve months as of Q2 2024. This valuation suggests a company with a reasonable earnings multiple in the technology sector. Additionally, the company's gross profit margin is impressive at 86.1%, highlighting its ability to retain a significant portion of its revenue after accounting for the cost of goods sold.
An InvestingPro Tip highlights that Paycom's management has been actively repurchasing shares, which could be a signal of confidence in the company's future and often serves to increase the value of remaining shares. Moreover, Paycom holds more cash than debt on its balance sheet, providing it with financial flexibility and potentially less risk for investors.
It's also noteworthy that analysts have revised their earnings expectations downwards for the upcoming period, which may warrant caution. However, the company is still predicted to be profitable this year, having been profitable over the last twelve months, and has provided a high return over the last decade.
For readers looking to delve deeper into Paycom's financials and market performance, InvestingPro offers additional insights. There are nine more InvestingPro Tips available at https://www.investing.com/pro/PAYC, which can further inform investment decisions regarding Paycom Software, Inc.
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