Paycom (NYSE:PAYC) Software, Inc.'s (NYSE:PAYC) CEO, President, and Chairman, Chad Richison, has executed a series of stock sales, according to recent filings. The transactions, all conducted on July 16, 2024, amounted to a total of $625,571. The sales were made at varying prices, with the lowest at $156.75 and peaking at $162.02 per share.
The sequence of transactions involved a total of 2,300 shares of Paycom's common stock. The sales are part of a pre-arranged trading plan under Rule 10b5-1, which allows company insiders to set up a predetermined plan to sell stocks at a time when they are not in possession of any private information.
The first block of 50 shares was sold at $156.75 each, followed by another set of 350 shares that fetched a weighted average price of $158.62. The latter sales took place in multiple transactions, with prices ranging from $158.16 to $158.85. Richison also sold 523 shares at an average price of $160.23, with these transactions occurring at prices between $159.76 and $160.58. Another 909 shares were sold at a weighted average of $161.18 per share, with individual sales prices ranging from $160.79 to $161.75. The final batch of 118 shares was disposed of at an average price of $162.02, with the price in individual transactions ranging from $161.89 to $162.20.
Following these sales, Richison's direct ownership in Paycom stands at 3,015,908 shares. Additionally, there were indirect sales through Ernest Group, Inc., where Richison is the sole director. The Ernest Group sold a total of 1,850 shares at prices within the same range as the direct sales. Post these transactions, Ernest Group's indirect holdings through Richison amount to 3,592,999 shares.
The Form 4 filing also noted holdings in various trusts for Richison's family members, indicating a broad set of indirect interests that may be influenced by the CEO's significant stake in the company.
Investors often keep a close watch on insider sales for insights into executives' perspectives on their company's stock value. While these transactions are pre-planned and provide a way for insiders to diversify their investment portfolio without timing the market, the sales can still signal to the market the insiders' long-term confidence in the company's performance.
Paycom Software, Inc., headquartered in Oklahoma City, specializes in providing comprehensive, cloud-based human capital management software to help businesses streamline their employment processes from recruitment to retirement.
In other recent news, Paycom Software has seen noteworthy developments. The company reported an 11% increase in revenue year-over-year, reaching $500 million, with net income and adjusted EBITDA exceeding expectations at $247 million and nearly $230 million, respectively. Despite these strong results, Paycom 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.
There have been significant changes in Paycom Software's leadership, including the appointment of a new COO, Randy Peck, who brings over 34 years of experience in payroll and human capital management. Other promotions include Matt Paque to Chief Legal Officer and Jennifer Kraszewski to Chief Human Resources Officer.
In terms of analyst notes, TD Cowen lowered its price target for Paycom to $170, citing a cautious approach to the company's strategic initiatives. BMO Capital maintained its Market Perform rating post the co-CEO's resignation, citing challenges due to macroeconomic pressures and strategic focus areas. Mizuho also reduced its price target on Paycom shares to $170, maintaining a neutral stance, citing challenges such as the cannibalization of its Beti product and potential macroeconomic headwinds.
InvestingPro Insights
Paycom Software, Inc. (NYSE:PAYC) has demonstrated robust financial metrics as per the latest data from InvestingPro. Notably, the company's gross profit margin for the last twelve months as of Q1 2024 stands at an impressive 86.55%, indicating a strong ability to retain earnings after the cost of goods sold. Additionally, Paycom's market capitalization is currently valued at $9.1 billion USD, reflecting the scale of its operations in the human capital management software market.
InvestingPro Tips highlight that Paycom holds more cash than debt on its balance sheet, which is a positive sign of financial stability and risk management. Furthermore, analysts predict the company will be profitable this year, with a reported net profit over the last twelve months. These factors combined with a P/E ratio of 19.65, which adjusts to 19.43 for the last twelve months as of Q1 2024, may suggest that the stock is trading at a low price relative to near-term earnings growth, potentially offering an attractive entry point for investors.
Despite recent insider sales by CEO Chad Richison, the company's financial performance may continue to be a key factor for investors. With a significant return over the last week of 14.54%, Paycom's stock price movements are worth watching. For those interested in deeper analysis, InvestingPro offers additional insights and tips, including 10 more InvestingPro Tips for Paycom, which can be found at https://www.investing.com/pro/PAYC. To access this valuable information, readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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