In a recent transaction, Chad R. Richison, the CEO, President, and Chairman of Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC), sold a significant amount of company stock, totaling over $630,000. The sales were conducted on October 9, 2024, as part of a prearranged trading plan.
The transactions involved the sale of Paycom common stock at prices ranging from $160.58 to $162.46 per share. Specifically, the shares were sold in multiple transactions at weighted average prices, with ranges for each set of transactions. The sales were reported in accordance with a joint Rule 10b5-1 trading plan adopted by Richison and Ernest Group, Inc. earlier in February 2024.
Richison sold 48 shares at an average price of $160.58, 748 shares at an average price of $161.82, and 1154 shares at an average price of $162.46. Following these transactions, Richison's direct ownership in the company decreased, but he still retains a substantial number of shares.
It should be noted that Richison may also be deemed to beneficially own additional shares held by Ernest Group, Inc., where he serves as the sole director. This entity is wholly owned by Richison and certain trusts for his children, for which he serves as trustee.
Moreover, there are shares owned by various trusts for the benefit of Richison's family members, including the Faye Penelope Richison 2023 Irrevocable Trust, the Rome West Pedersen 2023 Irrevocable Trust, and the Lane West Richison 2022 Irrevocable Trust, among others. Richison, as the settlor and sole trustee of these trusts, may also be deemed to beneficially own the shares they hold.
Investors often monitor insider transactions for insights into executive confidence in the company's prospects. The sale of a significant amount of stock by a top executive like Richison could be of interest to current and potential shareholders of Paycom Software, Inc.
In other recent news, Paycom Software has seen a series of significant developments. TD Cowen and BMO Capital have maintained their neutral ratings on Paycom but raised their price targets to $188 and $183 respectively, despite the company's downward revision of its revenue estimates for fiscal years 2024 and 2025. This adjustment came after a review of the company's financial forecasts and growth projections.
In the second quarter of 2024, Paycom reported a 9% increase in revenue to $438 million and a GAAP net income of $68 million. However, the company also revised its FY24 revenue guidance downward by 40 basis points. To counterbalance this, Paycom initiated a significant $1.5 billion share repurchase program.
Furthermore, Paycom announced the retirement of board member Robert J. Levenson and CFO Craig Boelte, with successors for these positions yet to be announced. These are the recent developments that have been reported. Please note that these facts are based on past articles and should be independently verified for the most current information.
InvestingPro Insights
To provide additional context to Chad R. Richison's recent stock sale, let's examine some key financial metrics and insights from InvestingPro for Paycom Software, Inc. (NYSE:PAYC).
As of the latest data, Paycom's market capitalization stands at $9.17 billion, with a price-to-earnings (P/E) ratio of 19.8. This P/E ratio is particularly interesting when considered alongside an InvestingPro Tip, which notes that PAYC is "Trading at a low P/E ratio relative to near-term earnings growth." This suggests that despite the CEO's stock sale, the company's valuation may still be attractive relative to its growth prospects.
Another relevant InvestingPro Tip highlights that Paycom "Holds more cash than debt on its balance sheet." This strong financial position could provide reassurance to investors concerned about the implications of insider selling. It indicates that the company maintains a solid financial foundation, which may support future growth initiatives or weather potential economic headwinds.
Paycom's revenue for the last twelve months as of Q2 2024 was $1.78 billion, with a revenue growth of 14.17% over the same period. The company also boasts an impressive gross profit margin of 86.1%, which aligns with the InvestingPro Tip mentioning "Impressive gross profit margins." This high profitability could be a factor in the company's ability to generate value for shareholders, even as executives like Richison make personal portfolio decisions.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 8 more InvestingPro Tips available for Paycom, which could provide further context to the company's financial health and market position beyond the insider transaction reported.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.