Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad Richison has recently sold a significant amount of company stock, according to the latest filings. The executive offloaded shares with a total value of over $647,000, transactions that took place on October 3, 2024.
The sales were conducted at weighted average prices that ranged between $165.57 and $166.42. Specifically, Richison sold 1,080 shares at an average price of $165.57 and another 870 shares at an average price of $166.42. Following these transactions, Richison's direct holdings in Paycom Software decreased, but he still retains a substantial stake in the company.
It is important to note that these sales were executed as part of a prearranged trading plan, known as a Rule 10b5-1 trading plan, which was adopted jointly by Richison and Ernest Group, Inc. on February 16, 2024. This type of plan allows insiders to sell shares at predetermined times to avoid accusations of trading on nonpublic information.
The SEC filing also mentioned various trusts for which Richison serves as trustee and which hold Paycom stock indirectly. These include trusts for the benefit of his children and grandchildren, demonstrating Richison's extended involvement with the company beyond his direct ownership.
Investors often watch insider trading activity as an indicator of executives' confidence in their company's prospects. The actions of Paycom's CEO will likely be of interest to current and potential shareholders as they assess the company's performance and outlook.
Paycom Software, headquartered in Oklahoma City, specializes in providing cloud-based human capital management software solutions and has been a player in the industry since its founding.
In other recent news, Paycom Software has experienced several significant developments. The company reported a 9% increase in Q2 2024 revenue, reaching $438 million, and a GAAP net income of $68 million. However, Paycom revised its FY24 revenue guidance downward by 40 basis points. In a strategic move, the company initiated a significant $1.5 billion share repurchase program.
TD Cowen and BMO Capital maintained their Hold and Market Perform ratings on Paycom, respectively, but raised their price targets. TD Cowen increased the price target to $188.00 from $171.00, while BMO Capital adjusted the price target to $183 from $160.
Also, Paycom announced the retirement of board member Robert J. Levenson and CFO Craig Boelte. The successors for these positions have not yet been announced. These are all recent developments that have been reported.
InvestingPro Insights
To provide additional context to Chad Richison's recent stock sales, it's worth examining some key financial metrics and insights from InvestingPro for Paycom Software (NYSE:PAYC).
According to InvestingPro data, Paycom's market capitalization stands at $9.36 billion, with a price-to-earnings (P/E) ratio of 20.15. This P/E ratio is relatively low compared to the company's near-term earnings growth, as highlighted by one of the InvestingPro Tips. This could suggest that the stock might be undervalued based on its earnings potential.
Paycom's financial health appears robust, with an InvestingPro Tip noting that the company "holds more cash than debt on its balance sheet." This strong financial position may provide reassurance to investors concerned about the CEO's recent stock sales.
Another notable InvestingPro Tip points out Paycom's "impressive gross profit margins." Indeed, the data shows a gross profit margin of 86.1% for the last twelve months as of Q2 2024, underscoring the company's operational efficiency.
While Richison's stock sales might raise eyebrows, it's important to consider that management has been "aggressively buying back shares," according to an InvestingPro Tip. This could indicate the company's confidence in its own stock value.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Paycom Software, providing a deeper understanding of the company's financial position and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.