Revealing a significant insider sell on November 14, Jeffrey T Diehl, Board Member at Paylocity Holding PCTY, as per the latest SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Diehl sold 593 shares of Paylocity Holding. The total transaction amounted to $126,386.

Monitoring the market, Paylocity Holding‘s shares down by 0.3% at $204.89 during Friday’s morning.

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 Challenges: Paylocity Holding’s revenue growth over 3 months faced difficulties. As of 30 September, 2024, the company experienced a decline of approximately -12.5%. This indicates 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.

Profitability Metrics: Unlocking Value

• Gross Margin: The company maintains a high gross margin of 68.05%, indicating strong cost management and profitability compared to its peers.

• Earnings per Share (EPS): Paylocity Holding’s EPS is below the industry average. The company faced challenges with a current EPS of 0.62. This suggests a potential decline in earnings.

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.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 61.16, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 8.65, Paylocity Holding’s stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio of 34.77, the company’s market valuation exceeds industry averages.

Market Capitalization Analysis: Falling below industry benchmarks, the company’s market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.

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Unmasking the Significance 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.

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.

Breaking Down the Significance of Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously 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 indicates 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.