Steven R Beauchamp At Paylocity Holding Executes Options Exercise, Realizing $9.35M

A large exercise of company stock options by Steven R Beauchamp, Executive Chairman at Paylocity Holding PCTY was disclosed in a new SEC filing on November 13, as part of an insider exercise.

What Happened: Beauchamp, Executive Chairman at Paylocity Holding, made a strategic move by exercising stock options for 53,000 shares of PCTY as detailed in a Form 4 filing on Wednesday with the U.S. Securities and Exchange Commission. The transaction value amounted to $9,346,020.

Currently, Paylocity Holding shares are trading down 0.0%, priced at $211.62 during Thursday's morning. This values Beauchamp's 53,000 shares at $9,346,020.

Unveiling the Story Behind Paylocity Holding

Paylocity is a provider of payroll and human capital management solutions servicing small- to midsize clients in the United States. The company was founded in 1997 and targets businesses with 10-5,000 employees and services about 39,000 clients as of fiscal 2024. Alongside core payroll services, Paylocity offers HCM solutions such as time and attendance and recruiting software as well as workplace collaboration and communication tools.

Breaking Down Paylocity Holding's Financial Performance

Revenue Challenges: Paylocity Holding's revenue growth over 3 months faced difficulties. As of 30 September, 2024, the company experienced a decline of approximately -12.5%. This indicates a decrease in top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Industrials sector.

Profitability Metrics: Unlocking Value

• Gross Margin: The company maintains a high gross margin of 68.05%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Paylocity Holding's EPS is below the industry average. The company faced challenges with a current EPS of 0.62. This suggests a potential decline in earnings.

Debt Management: Paylocity Holding's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.34.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 63.0 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 8.91 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an impressive EV/EBITDA ratio of 35.85, Paylocity Holding demonstrates exemplary market valuation, surpassing industry averages.

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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The Impact of Insider Transactions on Investments

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

Deciphering Transaction Codes in Insider Filings

Digging into the details of stock transactions, investors frequently turn their attention to those taking place in the open market, as outlined in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Paylocity Holding's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.