Paycom stock jumps on positive earnings report
Investors boosted Paycom's stock price by 7.8 percent on positive income and revenue news for the Oklahoma City-based firm.
Shares of the personnel software and services company gained $12.18 to close at $169.14 Wednesday on a day when the broader stock market was slightly down. A day earlier, Paycom told analysts and investors that it had income of $137 million, or $2.34 per share, in 2018 compared to net income of more than $123 million, or $2.10 a share, over the previous 12 months.
“I would say that the over-achievement that we had in fourth quarter was really attributed to the new client wins that we were able to onboard throughout the quarter,” President and CEO Chad Richison said during an earnings call Tuesday. Officials also announced they will break ground soon
on a new 14-acre Texas operations center in Grapevine that will house 1,000 workers. Richison said construction will begin in the first half of 2019 and will take 18 to 24 months to complete. Late last year, Paycom inked a deal with the city of Grapevine for $5 million in tax incentives to build there.
Chief Financial Officer Craig Boelte told analysts that Paycom ended the quarter with cash and cash equivalents of $45.7 million and total debt of $34.4 million. The debt represents financing for construction at the company's corporate headquarters in Oklahoma City.
During the fourth quarter of 2018, net income was $31.4 million, or 54 cents per share. That was a decrease over the fourth quarter of 2017, when Paycom brought in $48.9 million, or 83 cents a share.
Adjusted earnings before interest, taxes, depreciation and amortization was $57.5 million for the quarter and $241 million for the year, compared to $48.4 million and $186 million, respectively, in the year-ago periods.
Paycom had $566 million in revenue during 2018, which is a 31 percent increase over the previous year. The company's year-end report was buoyed by similar growth numbers in the fourth quarter, where revenues grew by 32 percent to $150 million.
After six years of holding at a 91 percent client retention rate, Paycom ended 2018 with a 92 percent retention rate and opened new sales offices in California, Ohio, Utah and New York.