Oklahoma City, OK - Chad Richison, CEO, President, and Chairman of Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC), reported selling shares of the company worth approximately $1.29 million, according to a recent SEC filing. The transactions were executed over two days, October 22 and 23, 2024, at prices ranging from $163.48 to $166.68 per share.
The sales were conducted under a Rule 10b5-1 trading plan, which allows company insiders to set up a predetermined plan to sell stocks they own, helping to avoid concerns about insider trading. Richison continues to hold a significant number of shares in the company following these transactions.
Paycom Software, a provider of cloud-based human capital management software solutions, is headquartered in Oklahoma City. The company remains a significant player in the prepackaged software industry.
In other recent news, Paycom Software has witnessed an array of developments. Despite a slight downward revision in revenue estimates for fiscal years 2024 and 2025, TD Cowen has raised the price target for Paycom's stock. The company also reported a 9% increase in Q2 2024 revenue, reaching $438 million, and a GAAP net income of $68 million. However, the FY24 revenue guidance was adjusted downward by 40 basis points.
In a strategic move, Paycom has initiated a significant $1.5 billion share repurchase program, a development that was positively received by analysts from TD Cowen and BMO Capital who maintained their Hold and Market Perform ratings on Paycom, respectively, but increased their price targets.
Also, 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 among the recent developments that have been reported in the past articles.
InvestingPro Insights
To provide additional context to Chad Richison's recent stock sales, it's worth examining some key financial metrics and insights from InvestingPro.
Paycom Software (NYSE:PAYC) currently has a market capitalization of $9.24 billion, with a P/E ratio of 19.9. This relatively low P/E ratio, especially when compared to the company's near-term earnings growth potential, suggests that the stock might be undervalued. In fact, one of the InvestingPro Tips highlights that PAYC is "Trading at a low P/E ratio relative to near-term earnings growth."
The company's financial health appears robust, with an InvestingPro Tip noting that Paycom "Holds more cash than debt on its balance sheet." This strong financial position could provide the company with flexibility for future growth initiatives or to weather potential economic headwinds.
Paycom's revenue for the last twelve months as of Q2 2024 stood at $1.78 billion, with a revenue growth of 14.17% over the same period. The company boasts impressive profitability metrics, including a gross profit margin of 86.1% for the last twelve months. This aligns with another InvestingPro Tip that points out Paycom's "Impressive gross profit margins."
It's worth noting that while CEO Richison has sold shares, management has been "aggressively buying back shares" according to an InvestingPro Tip. This could signal confidence in the company's future prospects and potentially support the stock price.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Paycom Software, providing a deeper understanding of the company's financial position and market performance.
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