Paycom Software, Inc. (PAYC) Misled Investors Regarding the Impact of its Beti Product on Revenue
A shareholder filed a class action lawsuit on behalf of persons and entities that purchased or otherwise acquired Paycom Software, Inc. (NYSE: PAYC) securities between May 3, 2023 and November 1, 2023. Paycom purports to be a “leading provider of a comprehensive, cloud-based human capital management (“HCM”) solution delivered as Software-as-a-Service.”
According to the complaint, during the class period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Paycom’s Beti product led to cannibalization of the Company’s services and revenues; (2) Paycom knew but failed to disclose that Beti was leading to cannibalization of the Company’s services and revenues, and failed to warn of cannibalization as a general risk; (3) as a result of cannibalization of revenue, Paycom missed its expected 3Q23 revenue and would have to revise its expected 2023 revenues; and (4) the cannibalization issue resulted in projected 2024 year-over-year revenue growth to between 10% and 12%, well below expectations.
On October 31, 2023, Paycom filed a report on Form 8-K announcing its financial results for the period ended September 30, 2023. In the corresponding earnings call, defendants announced that Beti was cannibalizing a portion of the Company’s services and revenues, which came in lower than expected, and caused the Company to revise its projected 2023 revenue. On this news, the price of Paycom stock fell $94.28 per share, or 38.38%, to close at $150.69 per share on November 1, 2023.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Paycom Software, Inc. Shareholders who want to act as lead plaintiff for the class should contact Robbins LLP. Plaintiffs must file their lead plaintiff papers by January 9, 2024. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
