A substantial insider sell was reported on November 7, by Jeffrey T Diehl, Board Member at Paylocity Holding PCTY, based on the recent SEC filing.

What Happened: After conducting a thorough analysis, Diehl sold 17,729 shares of Paylocity Holding. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The total transaction value is $3,443,121.

The latest market snapshot at Friday morning reveals Paylocity Holding shares down by 0.73%, trading at $209.18.

About 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.

Financial Milestones: Paylocity Holding’s Journey

Decline in Revenue: Over the 3 months period, Paylocity Holding faced challenges, resulting in a decline of approximately -12.5% in revenue growth as of 30 September, 2024. This signifies a reduction in the company’s top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Industrials sector.

Profitability Metrics:

• Gross Margin: With a high gross margin of 68.05%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): Paylocity Holding’s EPS reflects a decline, falling below the industry average with a current EPS of 0.62.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.34.

Exploring Valuation Metrics Landscape:

• Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 62.71, Paylocity Holding’s stock is perceived as being overvalued in the market.

• 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): Paylocity Holding’s EV/EBITDA ratio, surpassing industry averages at 35.68, positions it with an above-average valuation in the market.

Market Capitalization Analysis: Reflecting a smaller scale, the company’s market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

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Why Pay Attention to Insider Transactions

Insider transactions shouldn’t be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

In the context of 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 outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

Pointing towards optimism, a company insider’s new purchase signals their positive anticipation for the stock to rise.

Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.

A Closer Look at Important Transaction Codes

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates 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.