Chad Richison, CEO, President, and Chairman of Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC), has sold shares worth approximately $414,153, according to a recent SEC filing. The transactions, executed on October 31, 2024, saw Richison disposing of a total of 1601 shares of common stock. The shares were sold at prices ranging from $193.01 to $219.40 per share.
Following these transactions, Richison retains direct ownership of 2,748,973 shares. These sales were conducted under a pre-arranged trading plan, which was jointly established with Ernest Group, Inc. on February 16, 2024.
In addition to his direct holdings, Richison is also associated with several irrevocable trusts, which collectively own additional shares. These trusts are established for the benefit of his family members, including grandchildren and children.
In other recent news, Paycom Software has been experiencing significant growth, with recent reports showing an 11% year-over-year increase in revenue, reaching $452 million. This growth is primarily attributed to the company's automation initiatives, such as the GONE time-off solution. BMO (TSX:BMO) Capital Markets and Piper Sandler have both raised their target prices for Paycom, with BMO Capital setting a new target at $197 and Piper Sandler at $191, both maintaining a neutral stance on the stock.
Despite a robust third quarter, Paycom remains cautious for the fourth quarter, citing unpredictable bonus runs and interest rate fluctuations as potential challenges. The company's management has revised the 2024 revenue guidance to a narrower range, reflecting lower float assumptions despite the third quarter's upside.
Analysts from Oppenheimer have maintained a Perform rating for Paycom, applauding its third-quarter performance. Notably, Paycom's EBITDA for the quarter was reported to be stronger than expected. These are all recent developments that reflect Paycom's performance and strategic focus on automation solutions.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Paycom Software's financial position and market performance. The company's market capitalization stands at $11.49 billion, reflecting its significant presence in the payroll and human capital management software industry.
Paycom's financial health appears robust, with InvestingPro data showing a P/E ratio of 25.29, suggesting a reasonable valuation relative to earnings. This is further supported by an InvestingPro Tip indicating that Paycom is "Trading at a low P/E ratio relative to near-term earnings growth," which could be of interest to value-oriented investors considering the recent insider sales.
The company's revenue for the last twelve months as of Q3 2024 reached $1.82 billion, with a notable revenue growth of 11.92% over the same period. This growth aligns with another InvestingPro Tip highlighting that "Analysts predict the company will be profitable this year," underscoring the firm's continued financial strength despite the CEO's recent stock disposals.
Importantly, Paycom boasts impressive gross profit margins, with the latest data showing a gross profit margin of 85.62% for the last twelve months as of Q3 2024. This exceptional profitability is corroborated by an InvestingPro Tip that points out Paycom's "Impressive gross profit margins," which may provide reassurance to investors about the company's operational efficiency and pricing power.
For those interested in a more comprehensive analysis, InvestingPro offers 14 additional tips on Paycom Software, providing a deeper dive into the company's financial health and market position.
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