Chad Richison, CEO, President, and Chairman of Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC), recently sold shares of the company valued at $648,568, according to a Form 4 filing with the Securities and Exchange Commission. The transactions, executed on October 15, involved multiple sales of common stock at prices ranging from $164.92 to $168.34 per share.
Richison's sales were conducted under a joint trading plan with Ernest Group, Inc. Following these transactions, Richison retains significant direct ownership of 2,772,610 shares and indirect ownership through entities such as Ernest Group and various trusts.
In other recent news, Paycom Software has seen a series of developments. TD Cowen and BMO Capital both maintained their ratings on Paycom, but increased their price targets to $188 and $183 respectively. This decision follows their analysis of Paycom's financial forecasts and the announcement of a significant $1.5 billion share repurchase program. Despite this, the company has revised its FY24 revenue guidance downward by 40 basis points.
Paycom also reported a 9% increase in Q2 2024 revenue to $438 million, along with a GAAP net income of $68 million. However, revenue projections for fiscal years 2024 and 2025 were slightly trimmed, with float revenue projected at $107 million and $80 million for each year respectively. Adjusted EBITDA estimates for these periods have been slightly increased due to reduced research and development expenses.
Furthermore, Paycom disclosed 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
While Chad Richison's recent stock sale might raise eyebrows, it's essential to consider Paycom Software's broader financial picture. According to InvestingPro data, Paycom boasts a market capitalization of $9.16 billion and trades at a P/E ratio of 19.73, which is relatively modest for a tech company. This valuation becomes even more intriguing when considering an InvestingPro Tip that suggests Paycom is trading at a low P/E ratio relative to its near-term earnings growth.
The company's financial health appears robust, with an impressive gross profit margin of 86.1% for the last twelve months as of Q2 2024. This aligns with another InvestingPro Tip highlighting Paycom's "impressive gross profit margins." Additionally, Paycom holds more cash than debt on its balance sheet, indicating financial stability.
Despite the CEO's stock sale, management's overall confidence in the company is reflected in their aggressive share buyback program, as noted by an InvestingPro Tip. This strategy often signals that leadership believes the stock is undervalued.
For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips on Paycom Software, providing a deeper dive into the company's prospects and potential risks.
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