Chad Richison, the CEO, president and chairman of Paycom (NYSE:) Software (ETR:) Inc. (NYSE:PAYC), has sold a significant portion of its shares in the company. According to a recent SEC filing, Richison sold shares worth approximately $897,355. The transactions occurred on November 6, 2024, with sales prices ranging between $222.5 and $232.85 per share.
Richison’s sales were conducted under a joint Rule 10b5-1 trading plan, which he established with Ernest Group, Inc. earlier this year. had accepted. The trades spanned multiple trades and were executed at different price points within the specified range. Following these transactions, Richison retains direct ownership of 2,742,282 shares, while indirectly owning additional shares through entities such as Ernest Group and various irrevocable trusts.
The move is part of a broader trend of stock sales by executives at Paycom as Richison continues to manage his extensive stakes in the company. Investors will be keeping a close eye on how these sales impact the company’s stock performance in the coming weeks.
In other recent news, Paycom Software reports a notable 11% year-over-year revenue increase for the third quarter, to $452 million. This growth is largely attributed to the company’s automation initiatives. BMO Capital Markets and Piper Sandler both revised their price targets on Paycom, with BMO Capital raising the price to $197 and Piper Sandler to $191 while maintaining a neutral stance on the stock. Paycom’s EBITDA for the quarter was reportedly stronger than expected, a point emphasized by both companies. Despite a robust third quarter, Paycom remains cautious for the fourth quarter, citing unpredictable bonus runs and interest rate movements as potential challenges. Paycom management has revised its 2024 revenue guidance to a narrower range, reflecting lower float assumptions despite positive developments in the third quarter. The company’s CEO, Chad Richison, noted that September was the biggest sales month in Paycom’s history, mainly due to the acquisition of new logos. These are recent developments that reflect Paycom’s performance and strategic focus on automation solutions.
InvestingPro Insights
Because Chad Richison, CEO of Paycom Software Inc. (NYSE:PAYC), is conducting significant stock sales, it is critical to consider the company’s current financial position and market performance. According to data from InvestingPro, Paycom has a market cap of $12.7 billion and a price-to-earnings ratio of 27.39, suggesting a relatively moderate valuation for a fast-growing tech company.
One of the InvestingPro Tips highlights that Paycom has “more cash than debt on its balance sheet,” indicating a strong financial position despite recent insider sales. This robust cash position is consistent with another tip stating that “cash flows can adequately cover interest payments,” which could provide reassurance to investors concerned about the company’s financial stability in light of the CEO’s stock sales.
Interestingly, even though Richison is selling shares, the stock has shown impressive performance lately. Data from InvestingPro shows a total price return of 38.86% over the past month and a return of 49.09% over the past three months. This strong momentum is further supported by the InvestingPro Tip, which notes that Paycom is “trading near its 52-week high,” with the current price at 97.22% of its 52-week high.
For investors looking for a more in-depth analysis, InvestingPro offers 15 additional tips for Paycom, which provide a deeper insight into the company’s financial health and market position.
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