Chad Richison, CEO, President, and Chairman of Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC), recently sold a significant portion of his shares in the company. According to a filing with the Securities and Exchange Commission, Richison disposed of shares valued at approximately $644,198. The transactions occurred on October 24, with the sale prices ranging from $164.69 to $166.47 per share.
The sales were executed under a pre-established Rule 10b5-1 trading plan and involved multiple transactions. Following these sales, Richison retains direct ownership of 2,758,710 shares in Paycom Software, while additional shares are held indirectly through Ernest Group, Inc. The transactions were part of a broader strategy involving the Ernest Group, of which Richison is the sole director.
Investors and stakeholders may find these transactions noteworthy as they reflect Richison's current approach to managing his holdings in the software company.
In other recent news, Paycom Software has seen several significant developments. Despite a slight downward revision in revenue estimates for fiscal years 2024 and 2025 by TD Cowen, the firm raised its price target for Paycom from $171.00 to $188.00. This adjustment was due to a review of the company's financial forecasts, taking into account the current federal funds rate expectations and other growth projections. BMO Capital also increased its price target for Paycom, from $160 to $183, noting strong unit sales and the company's $1.5 billion share repurchase program.
Paycom's Q2 2024 revenue showed a 9% increase, reaching $438 million, along with a GAAP net income of $68 million. However, the company revised its FY24 revenue guidance downward by 40 basis points. In a strategic move, Paycom initiated a significant $1.5 billion share repurchase program.
In addition to these financial developments, Paycom announced the retirement of board member Robert J. Levenson and CFO Craig Boelte. The company has not yet announced successors for these positions. These are recent developments that have been reported in the past articles.
InvestingPro Insights
To provide context to Chad Richison's recent stock sale, it's worth examining Paycom Software's current financial position and market performance. According to InvestingPro data, Paycom (NYSE:PAYC) has a market capitalization of $9.23 billion and is trading at a P/E ratio of 19.84, which is relatively low compared to its near-term earnings growth potential.
One of the InvestingPro Tips highlights that Paycom holds more cash than debt on its balance sheet, indicating a strong financial position. This could suggest that the CEO's stock sale may not be related to any immediate financial concerns for the company.
Another relevant InvestingPro Tip points out that Paycom has impressive gross profit margins. Indeed, the data shows a gross profit margin of 86.1% for the last twelve months as of Q2 2024, underscoring the company's efficiency in generating profit from its revenue.
Despite the recent insider sale, Paycom's financials appear robust, with a revenue of $1.78 billion and an EBITDA growth of 34.72% over the same period. However, it's worth noting that the stock has seen a year-to-date price total return of -19.57%, which may have influenced the timing of Richison's stock sale.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights, with 7 more tips available for Paycom on the platform.
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