Steven I. Sarowitz, a director and ten percent owner of Paylocity (NASDAQ:PCTY) Holding Corp (NASDAQ:PCTY), reported selling a significant portion of the company's common stock. On November 6, Sarowitz executed multiple transactions, disposing of 25,839 shares for a total of approximately $7.3 million. The sales were conducted at prices ranging from $201.92 to $213.93 per share.
These transactions were carried out under an approved 10b5-1 trading plan, a prearranged trading strategy that allows insiders to buy or sell a predetermined number of shares at a predetermined time. Following these sales, Sarowitz retains direct ownership of 9,418,825 shares in Paylocity.
Paylocity, headquartered in Schaumburg, Illinois, provides cloud-based payroll and human capital management software solutions. The company's stock is traded on the NASDAQ under the ticker symbol PCTY.
In other recent news, Paylocity reported a 14% revenue growth in its first quarter, exceeding expectations and leading to an upward revision of its top-line forecast for fiscal year 2025 by $22 million. This robust performance has prompted several analyst upgrades, including Needham reaffirming its Buy rating, BMO (TSX:BMO) Capital raising its price target to $203, and Piper Sandler increasing its price target to $212. Jefferies upgraded Paylocity stock from Hold to Buy, setting a new price target of $200.00.
The company's acquisition of Airbase, a spend management platform, is expected to enhance Paylocity's product offerings and potentially drive further growth. Paylocity's effective margin leveraging strategy has also been commended, particularly in the current market climate anticipating lower interest rates.
Customers have praised Paylocity for its intuitive user experience, reporting capabilities, and strong Benefit Administration integrations, which set it apart from other options in the market. However, there have been changes in the company's leadership structure, with the departure of its Senior Vice President and Chief Technology Officer, Rachit Lohani, and board member Jeffrey T. Diehl deciding not to seek re-election at the upcoming annual meeting of stockholders.
These recent developments highlight Paylocity's operational strength and potential for continued growth. However, these are merely factual reports and do not imply any future predictions or expectations for the company.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Paylocity's financial position and market performance, providing context to the insider sale reported by Steven I. Sarowitz. The company's market capitalization stands at $11.79 billion, reflecting its significant presence in the cloud-based payroll and human capital management software sector.
Paylocity's financial metrics reveal a company with strong growth and profitability. The company boasts impressive gross profit margins, with a gross profit of $994.25 million and a gross profit margin of 68.67% for the last twelve months as of Q1 2023. This aligns with one of the InvestingPro Tips, which highlights Paylocity's "impressive gross profit margins."
The company's revenue growth remains robust, with a 16.87% increase over the last twelve months. This growth, coupled with an EBITDA growth of 41.84% over the same period, suggests that Paylocity is effectively scaling its operations and improving profitability.
Investors should note that Paylocity is trading at a relatively high valuation, with a P/E ratio of 53.37. This is consistent with another InvestingPro Tip indicating that the company is "trading at a high earnings multiple." Despite this, the stock has shown significant momentum, with a 29.96% price return over the past month and a 34.31% return over the last three months.
It's worth noting that Paylocity's stock price is currently trading near its 52-week high, with the price at 98.7% of its peak. This performance aligns with the InvestingPro Tip suggesting a "strong return over the last three months."
For investors seeking a more comprehensive analysis, InvestingPro offers 18 additional tips for Paylocity, providing a deeper understanding of the company's financial health and market position.
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