Steven I. Sarowitz, a director and significant shareholder of Paylocity (NASDAQ:PCTY) Holding Corp (NASDAQ:PCTY), has sold a substantial portion of his holdings in the company. According to a recent SEC filing, Sarowitz sold a total of 25,824 shares of Paylocity common stock on November 1, 2024. The transactions were completed at prices ranging from $185.68 to $191.81 per share, amounting to a total value of approximately $4.72 million.
Following these transactions, Sarowitz retains direct ownership of 9,488,736 shares. The sales were conducted under an approved 10b5-1 Plan, which was adopted by Sarowitz in September 2023. This plan allows insiders to set up a predetermined schedule for selling stocks to avoid potential accusations of insider trading. Additionally, Sarowitz holds an indirect interest in 20,000 shares through the Jessica P. Sarowitz Declaration of Trust.
Investors and analysts will likely scrutinize these transactions as they assess Paylocity's stock performance and Sarowitz's continued involvement with the company.
In other recent news, Paylocity Holding has been the focus of several analyst upgrades following robust first-quarter results, featuring a 14% revenue growth and higher-than-anticipated EBITDA margins. Needham reiterated its Buy rating on Paylocity, praising its customer support and competitive pricing, while BMO Capital and Piper Sandler raised their price targets to $203 and $212, respectively. Jefferies also upgraded Paylocity stock from Hold to Buy, setting a new price target of $200.00.
These upgrades come in response to recent developments at Paylocity, including the acquisition of Airbase, a spend management platform, expected to enhance the company's product offerings. The company also revised its top-line forecast for fiscal year 2025 upwards by $22 million, following strong financial performance.
Paylocity's effective margin leveraging strategy has also been commended, particularly in the current market climate anticipating lower interest rates. These developments, coupled with the company's strong operational capabilities, have bolstered analysts' confidence in Paylocity's prospects.
InvestingPro Insights
As investors digest the news of Steven I. Sarowitz's significant stock sale, it's worth considering additional financial metrics and insights from InvestingPro to provide a more comprehensive view of Paylocity Holding Corp's current position.
According to InvestingPro data, Paylocity boasts a market capitalization of $10.99 billion, reflecting its substantial presence in the payroll and human capital management software sector. The company's revenue for the last twelve months as of Q1 2025 stood at $1.45 billion, with a notable revenue growth of 16.87% over the same period. This growth trajectory aligns with the company's strong market position and could be a factor in the stock's recent performance.
InvestingPro Tips highlight that Paylocity holds more cash than debt on its balance sheet, which is a positive indicator of financial health, especially in the current economic climate. This strong cash position may provide reassurance to investors concerned about the director's stock sale.
Another relevant InvestingPro Tip notes that Paylocity has impressive gross profit margins. Indeed, the data shows a gross profit margin of 68.67% for the last twelve months as of Q1 2025, underscoring the company's efficiency in managing costs and potentially its pricing power in the market.
It's also worth noting that Paylocity's stock has shown significant momentum, with a 25.05% price total return over the past three months and a 31.73% return over the past year. The stock is currently trading near its 52-week high, with a price that is 99.96% of the highest point reached in the past year.
While these metrics paint a picture of a company with strong financial performance, potential investors should be aware that the stock is trading at a high P/E ratio of 49.77, which may indicate that the market has high growth expectations for Paylocity.
For those interested in a deeper analysis, InvestingPro offers 17 additional tips for Paylocity, providing a more comprehensive understanding of the company's financial health and market position.
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