Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad Richison has recently sold a portion of his holdings in the company's stock, according to a new SEC filing. The transactions, which took place on July 30, 2024, involved the sale of Paycom common stock totaling over $639,192.
The sales were executed in multiple transactions with prices ranging from $162.84 to $167.21 per share. These transactions were part of a pre-arranged trading plan, known as a 10b5-1 plan, which allows company insiders to sell shares at predetermined times to avoid accusations of insider trading.
Richison's sales come amidst his role as a significant shareholder of the company, with a post-transaction ownership of millions of shares in direct holdings. Additionally, Richison is connected to Ernest Group, Inc., where he serves as the sole director. Ernest Group, which is partially owned by trusts for Richison's children, also conducted sales of Paycom stock, suggesting a coordinated strategy under the trading plan.
The SEC filing also reported holdings in various trusts associated with Richison, including those for the benefit of his grandchildren and children. These holdings reflect indirect ownership through which Richison may be considered to have a beneficial interest.
Investors often monitor insider transactions for insights into executive confidence in the company. Sales under a 10b5-1 plan, however, are scheduled in advance and may not necessarily indicate a change in executive sentiment towards the company's future prospects.
Paycom Software, Inc., headquartered in Oklahoma City, is a leading provider of online payroll and human resource technology. As of the last transaction date, the company's stock was traded on the New York Stock Exchange under the ticker PAYC.
In other recent news, Paycom Software has made significant financial and leadership changes. The company reported an 11% year-over-year increase in revenue, reaching $500 million. Net income and adjusted EBITDA also surpassed expectations, hitting $247 million and nearly $230 million, respectively. Despite these strong results, Paycom 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 analysts have adjusted their outlook on Paycom. TD Cowen lowered its price target for Paycom to $170 due to lower-than-expected revenue guidance for FY24. Mizuho also reduced its price target on Paycom shares to $170, maintaining a neutral stance. BMO Capital maintained its Market Perform rating following the co-CEO's resignation, keeping its price target at $190.
In addition to these financial developments, Paycom has announced significant changes to its executive team, including the appointment of a new Chief Operating Officer, Randy Peck. Other promotions include Matt Paque to Chief Legal Officer and Jennifer Kraszewski to Chief Human Resources Officer. These changes are part of Paycom's strategic initiatives to drive future growth. Furthermore, Paycom's board of directors has approved an increase in the stock repurchase plan, now allowing for $1.5 billion in buybacks through August 15, 2026.
InvestingPro Insights
As Paycom Software, Inc. (NYSE:PAYC) navigates the dynamics of insider transactions, the company's financial health remains a key area of interest for investors. A glance at real-time data from InvestingPro shows a robust financial profile for Paycom, with a market capitalization of $9.42 billion, reflecting its significant presence in the online payroll and human resource technology sector.
InvestingPro data highlights Paycom's impressive gross profit margin, standing at 86.55% over the last twelve months as of Q1 2024. This figure not only underscores the company's efficiency in managing its cost of goods sold but also aligns with one of the InvestingPro Tips that points out Paycom's impressive gross profit margins. Moreover, the company's revenue growth remains strong, with an 18.23% increase in the last twelve months as of Q1 2024, indicating a solid top-line performance.
From a valuation standpoint, Paycom's P/E ratio is currently at 20.13, adjusted for the last twelve months as of Q1 2024. This metric, alongside the PEG ratio of 0.38, suggests that the stock is trading at a low price-to-earnings ratio relative to its near-term earnings growth, another InvestingPro Tip that could be of interest to value-oriented investors. For those seeking further insights, InvestingPro offers additional tips, with a total of 10 tips available for Paycom, which can be explored to gain a more comprehensive understanding of the company's financial nuances.
While CEO, President, and Chairman Chad Richison's recent stock sale might draw attention, the financial data and InvestingPro Tips provide a broader context for evaluating Paycom's performance and potential investment opportunities. For those interested in a deeper dive, more InvestingPro Tips and metrics are available at https://www.investing.com/pro/PAYC.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.