Revealing a significant insider sell on November 6, Jeffrey T Diehl, Board Member at Paylocity Holding PCTY, as per the latest SEC filing.

What Happened: After conducting a thorough analysis, Diehl sold 27,818 shares of Paylocity Holding. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total transaction value is $5,324,068.

The latest update on Thursday morning shows Paylocity Holding shares down by 0.0%, trading at $213.79.

Discovering Paylocity Holding: A Closer Look

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.

Understanding the Numbers: Paylocity Holding’s Finances

Negative Revenue Trend: Examining Paylocity Holding’s financials over 3 months reveals challenges. As of 30 September, 2024, the company experienced a decline of approximately -12.5% in revenue growth, reflecting a decrease in top-line earnings. When compared to others in the Industrials sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Insights into Profitability:

• Gross Margin: The company excels with a remarkable gross margin of 68.05%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Paylocity Holding’s EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.62.

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

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: Paylocity Holding’s stock is currently priced at a premium level, as reflected in the higher-than-average P/E ratio of 63.63.

• Price to Sales (P/S) Ratio: The current P/S ratio of 9.0 is above industry norms, reflecting an elevated valuation for Paylocity Holding’s stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Paylocity Holding’s EV/EBITDA ratio of 36.22 exceeds industry averages, indicating a premium valuation in the market

Market Capitalization Analysis: Positioned below industry benchmarks, the company’s market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

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Exploring the Significance of Insider Trading

It’s important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

In legal terms, an “insider” refers to any officer, director, or beneficial owner of more than ten percent of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Breaking Down the Significance of Transaction Codes

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously 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.