Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad Richison has sold a total of $567,637 worth of company stock, according to a recent SEC filing. The transactions occurred on June 12, 2024, with sales prices ranging from $144.30 to $146.65 per share.
Richison's stock sales were executed through a series of transactions, each at different price points within the specified range. The sales represent a part of Richison's holdings in the company, with the executive still retaining a significant number of shares following the transactions.
The sales took place under a prearranged 10b5-1 trading plan, which allows company insiders to set up a trading schedule in advance to avoid accusations of insider trading. This plan was jointly adopted by Richison and Ernest Group, Inc., an entity with which he is associated, on February 16, 2024.
The SEC filing did not disclose the exact number of shares sold at each price point within the range, but Richison has committed to providing full details to Paycom, its shareholders, or the SEC staff upon request.
Following the sales, Richison's direct ownership in Paycom Software remains substantial, with over 3 million shares held. Additionally, indirect ownership through entities such as Ernest Group, Inc. and various family trusts, suggests that Richison's overall financial interest in the company remains significant.
Paycom Software, Inc., headquartered in Oklahoma City, specializes in providing comprehensive, cloud-based human capital management software to help businesses manage the complete employment lifecycle from recruitment to retirement.
Investors often monitor insider sales for insights into executive sentiment about the company's future prospects. However, it's also common for executives to sell shares for personal financial planning, diversification, and other non-company-related reasons.
The details of the stock transactions are publicly accessible through the SEC's EDGAR database for those interested in reviewing the complete filing.
In other recent news, Paycom Software has been experiencing significant changes within its leadership team and strategic direction. The company saw the resignation of its co-CEO, leading to a Market Perform rating from BMO Capital. This was followed by several other leadership changes, including the appointment of a new Chief Operating Officer, Randy Peck, and the promotions of Matt Paque to Chief Legal Officer and Jennifer Kraszewski to Chief Human Resources Officer.
Paycom's recent Q1 2024 results highlighted an 11% increase in revenue year-over-year, reaching $500 million, with net income and adjusted EBITDA surpassing expectations at $247 million and nearly $230 million, respectively. Despite these robust results, the company 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.
Several analyst firms have adjusted their outlooks on Paycom. Mizuho 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. Similarly, TD Cowen lowered its stock price target to $170 due to a lower-than-anticipated revenue guidance for FY24. BMO Capital Markets also adjusted its outlook, reducing the stock price target to $190.00. Meanwhile, Citi set a new stock price target at $193.00, maintaining a neutral rating despite a revenue beat in the first quarter.
InvestingPro Insights
Amid the news of Paycom Software, Inc. (NYSE:PAYC) CEO Chad Richison's recent stock sale, investors and market watchers are keen to understand the broader financial context of the company. Paycom, a leader in cloud-based human capital management software, shows a mix of robust financial health and market challenges according to the latest data from InvestingPro.
An InvestingPro Tip highlights that Paycom has been effectively managing its capital, as evidenced by the fact that it holds more cash than debt on its balance sheet. This indicates a strong financial position that could provide resilience against market downturns and flexibility for future investments or share buybacks. Additionally, Paycom's impressive gross profit margins, which stand at an enviable 86.55% for the last twelve months as of Q1 2024, suggest that the company has been successful in maintaining profitability in its operations.
However, not all indicators are positive. Paycom's stock has experienced significant price declines over the past year, trading near its 52-week low, with a 55.98% drop in the one-year price total return as of the date provided. This could be a point of concern for investors, although some might see it as a potential buying opportunity if they believe the stock is undervalued.
The following InvestingPro Data metrics provide further insight into Paycom's current market standing:- The company's market capitalization is reported at $7.97 billion USD, reflecting its size and significance in the industry.- Paycom's P/E ratio, a measure of its current share price relative to its earnings per share, is 17.33, suggesting that the stock might be trading at a reasonable valuation in relation to its near-term earnings growth.- The PEG ratio, which accounts for earnings growth, stands at 0.33, indicating that the stock may be undervalued based on its earnings growth projections.
For those considering an investment in Paycom or looking for deeper analysis, there are additional InvestingPro Tips available. These include insights such as management's share buyback strategy, the stock's performance in oversold territory, and analysts' earnings revisions for the upcoming period. Interested readers can find more tips by visiting https://www.investing.com/pro/PAYC. Moreover, by using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more valuable insights.
With 15 additional InvestingPro Tips listed, investors have a wealth of information at their fingertips to make informed decisions about Paycom's stock and the potential impact of executive stock sales on their investment strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.