Chad Richison, the CEO, President, and Chairman of Paycom (NYSE:PAYC) Software (ETR:SOWGn) Inc. (NYSE:PAYC), has sold a significant portion of his holdings in the company. According to a recent SEC filing, Richison disposed of shares valued at approximately $897,355. The transactions occurred on November 6, 2024, with the sale prices ranging between $222.5 and $232.85 per share.
Richison's sales were executed under a joint Rule 10b5-1 trading plan, which he adopted with Ernest Group, Inc. earlier this year. The trades involved multiple transactions and were conducted at various price points within the specified range. Following these transactions, Richison retains direct ownership of 2,742,282 shares, while indirectly holding additional shares through entities such as Ernest Group and several irrevocable trusts.
This move comes as part of a broader trend of executive stock sales at Paycom, as Richison continues to manage his extensive holdings in the company. Investors will be keenly observing how these sales impact the company's stock performance in the coming weeks.
In other recent news, Paycom Software has reported a remarkable 11% year-over-year increase in revenue for the third quarter, reaching $452 million. This growth is largely attributed to the company's automation initiatives. BMO (TSX:BMO) Capital Markets and Piper Sandler have both revised their price targets for Paycom, with BMO Capital raising it to $197 and Piper Sandler to $191, while maintaining a neutral stance on the stock. Paycom's EBITDA for the quarter was reported to be stronger than anticipated, a point highlighted by both firms. Despite a robust third quarter, Paycom remains cautious for the fourth quarter, citing unpredictable bonus runs and interest rate fluctuations as potential challenges. Paycom's management has revised the 2024 revenue guidance to a narrower range, reflecting lower float assumptions despite the third quarter's upside. The company's CEO, Chad Richison, noted that September marked the largest sales month in Paycom's history, primarily due to new logo acquisitions. These are recent developments that reflect Paycom's performance and strategic focus on automation solutions.
InvestingPro Insights
As Chad Richison, CEO of Paycom Software Inc. (NYSE:PAYC), executes significant stock sales, it's crucial to consider the company's current financial position and market performance. According to InvestingPro data, Paycom boasts a market capitalization of $12.7 billion and a P/E ratio of 27.39, suggesting a relatively moderate valuation for a high-growth tech company.
One of the InvestingPro Tips highlights that Paycom "holds more cash than debt on its balance sheet," indicating a strong financial position despite the recent insider selling. This robust cash position aligns with another tip stating that "cash flows can sufficiently cover interest payments," which may provide reassurance to investors concerned about the company's financial stability in light of the CEO's stock sales.
Interestingly, while Richison is selling shares, the stock has shown impressive recent performance. InvestingPro data reveals a 38.86% price total return over the past month and a 49.09% return over the last three months. This strong momentum is further supported by the InvestingPro Tip noting that Paycom is "trading near 52-week high," with the current price at 97.22% of its 52-week peak.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Paycom, providing a deeper understanding of the company's financial health and market position.
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