Jeffrey T Diehl, Board Member at Paylocity Holding PCTY, disclosed an insider sell on November 13, according to a recent SEC filing.

What Happened: Diehl opted to sell 37,801 shares of Paylocity Holding, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The transaction’s total worth stands at $8,010,645.

As of Thursday morning, Paylocity Holding shares are down by 0.0%, currently priced at $211.62.

Delving into Paylocity Holding’s Background

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.

Key Indicators: Paylocity Holding’s Financial Health

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 competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Industrials sector.

Key Insights into 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 is below the industry average, signaling challenges in bottom-line performance 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.

Navigating Market Valuation:

• 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 63.0.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 8.91 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): A high EV/EBITDA ratio of 35.85 reflects market recognition of Paylocity Holding’s value, positioning it as more highly valued compared to industry peers.

Market Capitalization: Indicating a reduced size compared to industry averages, the company’s market capitalization poses unique challenges.

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The Relevance of 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.

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.

A Deep Dive into Insider Transaction Codes

When analyzing transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes 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.