Paycom Software (NYSE:PAYC) Shares Down 4.8% - Time to Sell?

Key Points

• Paycom (PAYC) fell 4.8% to about $131.60 on Tuesday on unusually low volume (212,735 shares, down ~88% vs. average) and is trading below its 50‑day ($138.62) and 200‑day ($172.35) moving averages.
• Analysts have been cutting price targets this month (KeyCorp, BMO, Citi, Guggenheim among them), leaving a consensus rating of Hold and an average price target of $170.71 (5 Buys, 11 Holds, 1 Sell).
• Fundamentals remain profitable: Paycom posted a slight EPS beat ($2.45 vs. $2.44) with revenue up 10.2% YoY to $544.3M, announced a $0.375 quarterly dividend (1.1% yield), and trades at a P/E of 16.36 with a $7.18B market cap.

Paycom Software, Inc. (NYSE:PAYC - Get Free Report) fell 4.8% on Tuesday . The company traded as low as $130.15 and last traded at $131.6020. 212,735 shares changed hands during trading, a decline of 88% from the average session volume of 1,764,601 shares. The stock had previously closed at $138.25.

Analyst Upgrades and Downgrades

A number of brokerages recently issued reports on PAYC. KeyCorp decreased their target price on shares of Paycom Software from $250.00 to $195.00 and set an "overweight" rating for the company in a research report on Thursday, February 12th. Cantor Fitzgerald upped their price target on shares of Paycom Software from $115.00 to $135.00 and gave the stock a "neutral" rating in a research note on Friday. BMO Capital Markets decreased their price objective on shares of Paycom Software from $175.00 to $137.00 and set a "market perform" rating for the company in a report on Thursday, February 12th. Guggenheim lowered their price objective on shares of Paycom Software from $210.00 to $180.00 and set a "buy" rating on the stock in a research note on Thursday, February 12th. Finally, Citigroup dropped their target price on Paycom Software from $185.00 to $128.00 and set a "neutral" rating on the stock in a report on Friday, February 13th. Five research analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average price target of $170.71.

Paycom Software Trading Down 4.3%

The business's fifty day moving average is $138.62 and its 200 day moving average is $172.35. The firm has a market capitalization of $7.18 billion, a P/E ratio of 16.36, a P/E/G ratio of 1.49 and a beta of 0.80.

Paycom Software (NYSE:PAYC - Get Free Report) last released its earnings results on Wednesday, February 11th. The software maker reported $2.45 EPS for the quarter, beating the consensus estimate of $2.44 by $0.01. The business had revenue of $544.30 million during the quarter, compared to analyst estimates of $542.79 million. Paycom Software had a net margin of 22.10% and a return on equity of 24.25%. The business's quarterly revenue was up 10.2% on a year-over-year basis. During the same period in the prior year, the business earned $2.32 earnings per share. As a group, sell-side analysts predict that Paycom Software, Inc. will post 7.15 earnings per share for the current fiscal year.

Paycom Software Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Monday, March 23rd. Stockholders of record on Monday, March 9th will be paid a dividend of $0.375 per share. The ex-dividend date of this dividend is Monday, March 9th. This represents a $1.50 annualized dividend and a dividend yield of 1.1%. Paycom Software's dividend payout ratio (DPR) is currently 18.54%.

Insider Activity

In other news, CFO Robert D. Foster sold 1,300 shares of the business's stock in a transaction on Wednesday, December 10th. The stock was sold at an average price of $162.66, for a total transaction of $211,458.00. Following the sale, the chief financial officer directly owned 14,747 shares of the company's stock, valued at $2,398,747.02. The trade was a 8.10% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 10.90% of the stock is owned by insiders.

Hedge Funds Weigh In On Paycom Software

A number of institutional investors have recently bought and sold shares of the stock. Corient Private Wealth LLC raised its holdings in Paycom Software by 218.3% during the 4th quarter. Corient Private Wealth LLC now owns 14,217 shares of the software maker's stock worth $2,266,000 after buying an additional 9,750 shares during the period. Union Savings Bank acquired a new position in shares of Paycom Software in the fourth quarter worth about $80,000. Hsbc Holdings PLC increased its position in shares of Paycom Software by 25.5% in the fourth quarter. Hsbc Holdings PLC now owns 98,103 shares of the software maker's stock worth $15,651,000 after acquiring an additional 19,937 shares in the last quarter. Caitong International Asset Management Co. Ltd increased its position in shares of Paycom Software by 66,500.0% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 666 shares of the software maker's stock worth $106,000 after acquiring an additional 665 shares in the last quarter. Finally, MidFirst Bank acquired a new stake in shares of Paycom Software during the fourth quarter valued at approximately $802,000. Hedge funds and other institutional investors own 87.77% of the company's stock.

Paycom Software Company Profile

Paycom Software, Inc NYSE: PAYC is a cloud-based human capital management (HCM) software provider that delivers an end-to-end solution for human resources, payroll, talent acquisition, time and labor management, and talent management. Its single-database platform enables organizations to process payroll, track time, administer benefits, and manage recruiting and employee development through a unified system. Paycom's software is designed to streamline administrative tasks, improve data accuracy, and provide real-time reporting and analytics to support strategic HR decisions.

The company's core offerings include payroll processing with built-in tax compliance, employee self-service functionality, automated time tracking, and customizable talent acquisition tools that allow employers to create and post job requisitions, screen candidates, and conduct onboarding electronically.

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