Chad Richison, the CEO, President, and Chairman of Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC), recently sold shares of the company's stock valued at approximately $637,681. The transactions, conducted on October 16, involved the sale of a total of 3,300 shares at prices ranging from $163.20 to $164.97 per share.
These sales were executed under a joint Rule 10b5-1 trading plan, established by Richison and Ernest Group, Inc., which is wholly owned by Richison and certain trusts for his children. Following the transactions, Richison holds 2,770,410 shares directly, with additional shares held indirectly through various trusts and Ernest Group, Inc.
Investors often watch insider transactions like these for insights into the executive's confidence in the company's future performance.
In other recent news, Paycom Software has seen several notable developments. Despite a downward revision in revenue estimates for fiscal years 2024 and 2025 by TD Cowen, the firm maintained its Hold rating and raised the price target for Paycom to $188. The company's Q2 2024 results displayed a 9% increase in revenue to $438 million alongside a GAAP net income of $68 million. However, Paycom revised its FY24 revenue guidance downward by 40 basis points and initiated a significant $1.5 billion share repurchase program.
Analysts from both TD Cowen and BMO Capital maintained their Hold and Market Perform ratings on Paycom, respectively, but increased their price targets in light of these recent developments. The company also announced the retirement of board member Robert J. Levenson and CFO Craig Boelte, with successors yet to be named. These are the recent developments that have been reported in the past articles.
InvestingPro Insights
While Chad Richison's recent stock sale might raise eyebrows, a deeper look at Paycom Software's financials reveals a more nuanced picture. According to InvestingPro data, Paycom boasts impressive gross profit margins of 86.1% for the last twelve months as of Q2 2024, underscoring the company's operational efficiency. This aligns with one of the InvestingPro Tips, which highlights Paycom's "impressive gross profit margins."
Despite the recent insider sale, Paycom's financial health appears robust. The company's P/E ratio stands at 19.83, which is relatively low compared to its PEG ratio of 0.38, suggesting that the stock might be undervalued relative to its growth prospects. This is further supported by an InvestingPro Tip indicating that Paycom is "trading at a low P/E ratio relative to near-term earnings growth."
It's worth noting that Paycom has been profitable over the last twelve months, with a basic EPS (Continuing Operations) of $8.28. This profitability is expected to continue, as another InvestingPro Tip mentions that "analysts predict the company will be profitable this year."
For investors seeking more comprehensive insights, InvestingPro offers additional tips and analysis on Paycom Software. In fact, there are 7 more tips available on the InvestingPro platform, providing a deeper understanding of the company's financial position and market performance.
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