Chad Richison, CEO, President, and Chairman of Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC), has sold shares worth $643,366, according to a recent SEC filing. The transactions, completed on October 25, involved the sale of common stock at prices ranging from $164.41 to $166.1 per share.
Richison, who also serves as a director and a ten percent owner of the company, executed these sales through a Rule 10b5-1 trading plan. This plan was adopted in conjunction with Ernest Group, Inc., of which Richison is the sole director and a significant owner. Following these transactions, Richison's direct ownership of Paycom shares stands at 2,756,760 shares, while Ernest Group, Inc. retains ownership of an additional 3,452,599 shares.
The sales were part of a series of transactions that included multiple trades, with shares sold at varying prices within the specified range. These moves are part of routine portfolio management under pre-established trading plans.
In other recent news, Paycom Software has seen major changes in its financial forecasts and leadership. TD Cowen maintained a Hold rating on the company, raising the price target to $188.00, despite a slight downward revision in revenue estimates for fiscal years 2024 and 2025. The firm also introduced estimates for fiscal year 2026, based on the estimated enterprise value to free cash flow. In line with this, BMO Capital has also maintained a Market Perform rating on Paycom, raising the price target to $183.
Paycom reported a 9% increase in Q2 2024 revenue to $438 million and a GAAP net income of $68 million. However, the company revised its FY24 revenue guidance downward slightly. On a strategic note, Paycom initiated a significant $1.5 billion share repurchase program.
The company also announced the retirement of board member Robert J. Levenson and CFO Craig Boelte, with successors yet to be named. These are recent developments that have been reported in the past articles.
InvestingPro Insights
While Chad Richison's recent stock sale might raise eyebrows, it's essential to consider Paycom's overall financial health and market position. According to InvestingPro data, Paycom Software, Inc. (NYSE:PAYC) boasts a market capitalization of $9.36 billion and impressive gross profit margins of 86.1% for the last twelve months as of Q2 2024. This aligns with one of the InvestingPro Tips, which highlights Paycom's "impressive gross profit margins."
Despite the CEO's stock sale, the company's fundamentals appear strong. Paycom's revenue for the last twelve months stands at $1.78 billion, with a solid revenue growth of 14.17% over the same period. The company's profitability is also noteworthy, with a P/E ratio of 20.21, which is relatively low compared to its growth prospects. This is reflected in another InvestingPro Tip, stating that Paycom is "trading at a low P/E ratio relative to near-term earnings growth."
It's worth noting that management has been aggressively buying back shares, as indicated by one of the InvestingPro Tips. This could potentially offset the impact of insider sales and demonstrate confidence in the company's future prospects. For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Paycom, providing deeper insights into the company's financial health and market position.
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