Chad Richison, CEO, President, and Chairman of Paycom (NYSE:PAYC) Software (ETR:SOWGn), Inc. (NYSE:PAYC), has recently sold a significant number of shares in the company. According to a recent SEC filing, Richison sold shares totaling $844,723. The sales occurred on November 6, 2024, with share prices ranging from $209.47 to $217.74.
The transactions were part of a trading plan under Rule 10b5-1, jointly adopted by Richison and Ernest Group, Inc. The sales involved multiple transactions, with Richison retaining a substantial amount of shares post-transaction. The shares sold were both directly owned and indirectly through Ernest Group, Inc., where Richison serves as the sole director.
These transactions come as part of regular financial management and planning by Richison, who continues to maintain a significant stake in Paycom Software.
In other recent news, Paycom Software has demonstrated robust growth with its third-quarter results showing an 11% year-over-year revenue increase to $452 million. This growth is largely attributed to the company's automation initiatives, particularly the GONE time-off solution. The company's EBITDA for the quarter was reported to be stronger than expected, a point highlighted by BMO Capital, Piper Sandler, and Oppenheimer.
In response to these results, several analyst firms have adjusted their outlooks on Paycom. BMO Capital Markets raised its price target to $197, while maintaining a Market Perform rating. Piper Sandler also increased its price target to $191, continuing to hold a Neutral stance on the stock. Oppenheimer maintained a Perform rating, applauding Paycom's third-quarter performance.
Despite a strong third quarter, Paycom remains cautious for the fourth quarter, citing unpredictable bonus runs and interest rate fluctuations as potential challenges. The company's management has revised the 2024 revenue guidance to a narrower range, reflecting lower float assumptions despite the third quarter's upside. These are recent developments that reflect Paycom's performance and strategic focus on automation solutions.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Paycom Software's financial position and market performance, providing context to CEO Chad Richison's recent stock sales.
Paycom's stock has shown impressive momentum recently, with InvestingPro data revealing a 34.16% return over the past week and a 37.58% return over the last month. This strong performance aligns with an InvestingPro Tip indicating that the stock is trading near its 52-week high, currently at 98.89% of that peak.
The company's financial health appears robust, with an InvestingPro Tip highlighting that Paycom holds more cash than debt on its balance sheet. This strong liquidity position may provide reassurance to investors in light of the CEO's stock sales.
From a valuation perspective, Paycom's P/E ratio stands at 28.05, which an InvestingPro Tip suggests is low relative to the company's near-term earnings growth. This could indicate potential undervaluation, despite the recent stock price surge.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Paycom Software, providing a deeper understanding of the company's financial position and market outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.