Paycom CEO Chad Richison Sells More Than $675,000 in Company Shares by Investing.com

Chad Richison, CEO, Chairman and President of Paycom (NYSE:) Software, Inc. (NYSE:PAYC), has sold a significant portion of its holdings in the company. On September 24, Richison executed a series of trades that resulted in a total sale of more than $675,000 worth of Paycom stock.

The sales were made at different prices, with the range for the shares sold being between $172.48 and $174.96. Those trades were part of a pre-arranged trading plan, known as a 10b5-1 plan, which allows company insiders to sell stock at predetermined times to avoid any accusations of trading on non-public information.

The exact number of shares sold at each price point in the range was not disclosed; however, Richison has agreed to provide full details to Paycom Software, Inc., its security holder or SEC staff upon request. This information is pertinent because the prices reported are weighted average prices and the shares were sold in multiple transactions at prices within the specified ranges.

This move by Richison resulted in a change in his direct and indirect holdings in the company. Following the sales, his direct ownership in Paycom is 2,803,110 shares. In addition, Richison’s indirect holdings through Ernest Group, Inc., where he is the sole director, were also adjusted. Ernest Group, Inc. is owned by Richison and certain trusts for his children, for which he serves as trustee.

The details of the transaction are of interest to investors who closely monitor insider trading activities because they can provide insight into an insider’s view of the company’s valuation. It is worth noting that insider selling does not always indicate a lack of confidence in the company; they may also reflect personal financial management strategies.

Investors and analysts will likely continue to watch Paycom’s stock performance and any other insider trades for signs of the company’s continued financial health and strategic direction.

In other recent news, Paycom Software has seen several noteworthy developments. The company reported a 9% increase in Q2 2024 revenue to $438 million, along with GAAP net income of $68 million. However, FY24 revenue guidance has been revised down by 40 basis points. To counter this, Paycom initiated a significant share buyback program of $1.5 billion.

The company also announced the retirement of board member Robert J. Levenson and chief financial officer Craig Boelte, although successors for those positions have not yet been named. Paycom’s financial forecasts were adjusted by analysts at TD Cowen and BMO Capital, who maintained their Hold and Market Perform ratings for the company, respectively, but raised their price targets.

These are among the recent developments that have emerged from the company’s previous articles.

InvestingPro Insights

As Paycom Software, Inc. (NYSE:PAYC) navigates the market, it is important for investors to consider key financial metrics and management strategies that could affect the company’s valuation. According to recent data from InvestingPro, Paycom boasts a robust market capitalization of around $9.43 billion. With a Price-to-Earnings (P/E) ratio of 20.44, Paycom appears to be trading at a reasonable valuation considering near-term earnings growth.

InvestingPro Tips suggests that Paycom’s management has been proactively buying shares, a move that often signals confidence in the company’s prospects and a commitment to shareholder value. Additionally, Paycom holds more cash than debt on its balance sheet, indicating a strong liquidity position that can be advantageous in navigating economic fluctuations. These strategies and financial positions are critical for investors to consider, especially in light of the CEO’s recent stock selloff.

In terms of performance, Paycom has demonstrated impressive growth and profitability. The company posted revenue growth of 14.17% over the trailing twelve months through Q2 2024, with a gross profit margin of 86.1%, reflecting operational efficiency and a strong market position. Moreover, the company has been profitable for the past twelve months, strengthening its financial stability.

For investors looking for additional information and in-depth analysis, there are several InvestingPro tips available that further explore the financial health and potential of the Paycom market. These include observations on company valuation multiples, profitability forecasts and historical returns, all of which are crucial to making informed investment decisions.

This article was generated with support from AI and reviewed by an editor. For more information, see T&C.