Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad R. Richison has sold a portion of his company stock, with transactions amounting to over $650,000. The executive offloaded shares at prices ranging between $166.12 and $169.76.
The sales, which occurred on September 12, 2024, were executed through a joint Rule 10b5-1 trading plan adopted by Richison and Ernest Group, Inc., indicating a planned and scheduled divestiture. The transactions involved several blocks of Common Stock, with the largest single sale priced at an average of $167.78 per share.
Richison's transactions included sales of 400 shares at an average price of $166.12, 453 shares at $167.00, 1047 shares at $167.78, and a smaller batch of 50 shares at $169.76. Following these sales, Richison's directly owned holdings in Paycom Software decreased, but he still holds a substantial amount of shares both directly and indirectly.
Indirect ownership through entities like Ernest Group, Inc., for which Richison serves as the sole director, and various family trusts, remains significant. These entities include trusts for the benefit of Richison's grandchildren and children, such as the Faye Penelope Richison 2023 Irrevocable Trust and the Ian D. Richison 2012 Irrevocable Trust, among others.
Investors and followers of Paycom Software, Inc. often monitor such filings for insights into executive confidence and company health. Richison's recent stock sales are part of a pre-arranged plan and provide a window into the trading activities of Paycom's top executive.
In other recent news, Paycom Software has displayed a robust financial performance, despite a downward revision in its FY24 revenue guidance. The firm's Q2 2024 revenue rose by 9%, hitting the $438 million mark, with a GAAP net income of $68 million and an adjusted EBITDA of nearly $160 million, reflecting a 36.5% margin. Analysts from TD Cowen and BMO Capital have maintained their Hold and Market Perform ratings on Paycom respectively, but have increased their price targets following the company's financial performance and strategic actions. TD Cowen raised the shares target from $147.00 to $171.00, while BMO Capital increased the price target to $183 from $160.
In addition to these financial developments, Paycom announced a significant $1.5 billion share repurchase program, which aligns with the broader pattern of share buybacks among Human Capital Management (HCM) payroll peers. This buyback plan is expected to have a stabilizing effect on its stock. Despite the upcoming retirement of CFO Craig Boelte, Paycom maintains a robust financial position.
In terms of product developments, Paycom's automation tools, Beti and GONE, have received positive reception. These recent developments underscore the company's focus on growth and automation.
InvestingPro Insights
As Paycom Software, Inc. (NYSE:PAYC) navigates through the market, recent data from InvestingPro provides a deeper look into the company's financial health and market performance. Paycom's management has been actively engaging in share buybacks, which often signals confidence in the company's value and prospects. This aligns with the executive stock sales under a pre-arranged trading plan, possibly reflecting a strategic approach to managing personal and corporate finances.
On the balance sheet, Paycom holds more cash than debt, a positive indicator of financial stability. This, combined with an impressive gross profit margin of 86.1% for the last twelve months as of Q2 2024, suggests a strong capacity for generating earnings relative to its revenue. Moreover, Paycom's Price/Earnings (P/E) ratio stands at 20.32, which, when paired with a low Price/Earnings to Growth (PEG) ratio of 0.38, indicates that the stock may be trading at an attractive price relative to near-term earnings growth potential.
The company's market capitalization is currently $9.47 billion, reflecting its standing in the market. Additionally, Paycom's revenue growth over the last twelve months has been a healthy 14.17%, showcasing the company's ability to increase its sales over time. Such financial metrics are essential for investors looking to gauge the company's performance and future growth prospects.
For more in-depth analysis and additional InvestingPro Tips on Paycom Software, Inc., investors can explore the full list of tips available at: Investing.com/pro/PAYC, which includes insights on earnings revisions, valuation multiples, and profitability forecasts that could inform investment decisions.
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