Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) CEO, President, and Chairman Chad R. Richison has sold a portion of his holdings in the company, according to a recent SEC filing. The transactions, which took place on September 17, 2024, involved the sale of company common stock at prices ranging from $168.9 to $171.4 per share.
The filing indicates that Richison sold a total of 1950 shares in multiple transactions, resulting in total proceeds of approximately $662,347. The sales were conducted at weighted average prices, with individual transactions occurring within specified price ranges. For instance, some shares were sold at prices between $168.51 and $169.50, while others were sold in a range from $169.50 to $169.86. Additional sales took place at prices from $169.89 to $170.86, and the highest price range reported was from $171.04 to $171.98.
Following these transactions, Richison's direct ownership in the company has been adjusted to reflect the reduced number of shares. The filing also notes that certain shares are owned indirectly by Ernest Group, Inc., which is associated with Richison and his family trusts. Richison, as the sole director of Ernest Group, may be deemed to beneficially own these shares.
The SEC filing also includes a footnote indicating that the sales were executed pursuant to a joint Rule 10b5-1 trading plan adopted by Richison and Ernest Group earlier in the year. This type of trading plan allows insiders to sell shares at predetermined times to avoid accusations of insider trading.
Richison's recent stock sale and the remaining ownership stakes underscore the ongoing financial movements within Paycom's upper management. Investors typically monitor such filings for insights into executives' perspectives on their company's stock and future performance.
In other recent news, Paycom Software has reported a 9% increase in its Q2 2024 revenue, reaching $438 million, along with a GAAP net income of $68 million. Despite strong results, the company revised its FY24 revenue guidance downward by 40 basis points, causing some uncertainty. TD Cowen and BMO Capital both maintained their Hold and Market Perform ratings on Paycom respectively, but increased their price targets following the company's financial performance. In addition, Paycom announced a substantial $1.5 billion share repurchase program, expected to stabilize the company's stock. These are among the recent developments in the company's financial activities. Despite the upcoming retirement of CFO Craig Boelte, Paycom maintains a robust financial position. The company's focus on growth and automation is underscored by positive reception for their automation tools, Beti and GONE.
InvestingPro Insights
In light of the recent transactions by Paycom Software, Inc. (NYSE:PAYC) CEO Chad R. Richison, a deeper dive into the company's financial health and market performance may offer investors additional context. Paycom has been making notable strides, as reflected in the InvestingPro Data metrics. The company boasts a solid market capitalization of $9.57 billion, with a robust gross profit margin of 86.1% over the last twelve months as of Q2 2024. This impressive profitability is further underscored by an operating income margin of 32.87% in the same period.
InvestingPro Tips for Paycom highlight management's confidence in the company's value, as evidenced by aggressive share buybacks. Additionally, with the firm holding more cash than debt on its balance sheet, Paycom's financial stability is reassuring for investors. These strategic moves are coupled with a strong return over the last three months, with a price total return of 19.77%.
While some analysts have revised their earnings expectations downwards for the upcoming period, Paycom's low P/E ratio relative to near-term earnings growth, standing at 20.25 for the last twelve months as of Q2 2024, could suggest a potentially undervalued stock. For those seeking further insights, there are 11 additional InvestingPro Tips available at InvestingPro, which delve into other dimensions of Paycom's financial performance and market valuation.
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