On November 7, a recent SEC filing unveiled that Jeffrey T Diehl, Director at Paylocity Holding PCTY made an insider sell.

What Happened: Diehl’s decision to sell 29,606 shares of Paylocity Holding was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The total value of the sale is $5,819,146.

Paylocity Holding‘s shares are actively trading at $209.01, experiencing a down of 0.81% during Friday’s morning session.

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.

Paylocity Holding: A Financial Overview

Revenue Growth: Paylocity Holding’s revenue growth over a period of 3 months has faced challenges. As of 30 September, 2024, the company experienced a revenue decline of approximately -12.5%. This indicates a decrease in the company’s top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Industrials sector.

Insights into Profitability:

• Gross Margin: The company sets a benchmark with a high gross margin of 68.05%, reflecting superior cost management and profitability compared to its 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 the industry average at 0.34, reflecting a lower dependency on debt financing and a more conservative financial approach.

Evaluating Valuation:

• Price to Earnings (P/E) Ratio: Paylocity Holding’s current Price to Earnings (P/E) ratio of 62.71 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 8.87 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 EV/EBITDA ratio of 35.68, the company’s market valuation exceeds industry averages.

Market Capitalization Perspectives: The company’s market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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Unmasking the Significance of Insider Transactions

Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.

When discussing legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Transaction Codes Worth Your Attention

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies 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.