Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad Richison has sold a portion of his holdings in the company, according to a recent filing with the Securities and Exchange Commission. The transactions, which took place on July 11, 2024, involved the sale of company stock valued at over $558,000.
The series of transactions saw shares sold at prices ranging from $141.47 to $144.32. This range of prices reflects the weighted average prices of the shares sold in multiple transactions. The SEC filing details that Richison disposed of 108 shares at an average price of $141.47, 628 shares at $142.62, 1174 shares at $143.47, and 40 shares at $144.32. The sales were conducted under a joint Rule 10b5-1 trading plan, which was adopted by Richison and Ernest Group, Inc. on February 16, 2024.
Following the sales, Richison's direct ownership in Paycom Software stands at 3,021,758 shares. Additionally, the filing indicates indirect ownership of shares through Ernest Group, Inc., where Richison serves as the sole director. Ernest Group is owned by Richison and certain trusts for his children, for which he serves as trustee.
The SEC document also lists several holdings in trusts for the benefit of Richison's family members, indicating a complex structure of indirect ownership. 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.
Investors often scrutinize insider transactions such as these for insights into executives' perspectives on their company's future performance. While the reasons for Richison's stock sale are not disclosed in the filing, the use of a pre-arranged trading plan can help insiders avoid allegations of trading on non-public information.
Paycom Software, Inc., headquartered in Oklahoma City, Oklahoma, specializes in providing comprehensive, cloud-based human capital management software solutions. The company's offerings assist businesses in effectively managing the complete employment lifecycle from recruitment to retirement.
In other recent news, Paycom Software has been subject to several adjustments by analysts following its Q1 2024 results. TD Cowen revised its outlook on Paycom, cutting the price target to $170 and maintaining a Hold rating. This adjustment was due to a cautious stance on the company's strategic initiatives and a slight decrease in revenue estimates, despite a slight increase in expectations for float revenue. Similarly, Mizuho reduced its price target to $170, citing potential challenges such as the cannibalization of its Beti product and possible macroeconomic headwinds.
On the earnings front, Paycom reported an 11% increase in year-over-year revenue, reaching $500 million. Net income and adjusted EBITDA surpassed expectations, coming in at $247 million and nearly $230 million, respectively. Despite these robust results, the company 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.
In addition to these financial developments, Paycom has undergone major leadership changes. The company appointed Randy Peck as the new Chief Operating Officer, bringing over 34 years of experience in payroll and human capital management. Other promotions included Matt Paque to Chief Legal Officer and Jennifer Kraszewski to Chief Human Resources Officer. These recent developments provide a snapshot of the ongoing changes within Paycom Software.
InvestingPro Insights
In light of the recent insider transactions at Paycom Software, Inc. (NYSE:PAYC), it's worth considering the broader financial context in which these sales occurred. According to InvestingPro data, Paycom has a market capitalization of $8.4 billion and is trading at a price-to-earnings (P/E) ratio of 18.26. The company's P/E ratio for the last twelve months as of Q1 2024 is slightly lower at 17.9, indicating a potentially favorable position relative to its earnings.
InvestingPro Tips highlight that Paycom holds more cash than debt on its balance sheet and boasts impressive gross profit margins of 86.55% for the same period. These factors, combined with a PEG Ratio of 0.33, suggest that the company is priced attractively relative to its earnings growth. Additionally, Paycom's stock is trading near its 52-week low, which may represent a potential entry point for investors considering the company's fundamentals.
For those interested in a deeper dive into Paycom's financials and further strategic insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/PAYC. Readers can use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, accessing a total of 12 InvestingPro Tips that could further inform investment decisions regarding Paycom Software, Inc.
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