Sprout Social, Inc. (NASDAQ:SPT) CFO and Treasurer Joseph Del Preto has recently sold a portion of his company shares, according to the latest SEC filings. The transactions, which took place on October 7, 2024, involved the sale of 1,500 shares of Class A Common Stock at a weighted average price of $28.274 per share.
Investors following insider activity at Sprout Social would note that the shares were sold in multiple transactions at prices ranging from $27.96 to $28.53. The total value of the shares sold by Del Preto amounted to approximately $42,411.
Following the sale, Del Preto's remaining stake in the company includes a significant number of restricted stock units (RSUs) that are set to vest over the coming years. The details of these RSUs, as outlined in the footnotes of the SEC filing, indicate a structured vesting schedule that includes various installments beginning on December 1, 2024, and extending into 2025.
The filing also noted that the transactions were conducted under a prearranged 10b5-1 trading plan, which Del Preto had adopted on August 16, 2023. Such plans allow company insiders to establish predetermined trading arrangements for selling stocks at a time when they are not in possession of material non-public information, providing a defense against accusations of insider trading.
The SEC filing was signed on behalf of Joseph Del Preto by Heidi Jonas, Attorney-in-fact, on October 8, 2024. Investors and analysts often monitor insider sales as they can provide insights into an insider's view of the company's current valuation and future prospects.
In other recent news, Sprout Social reported a significant 25% year-over-year increase in revenue to $99.4 million in the second quarter, with subscription revenue accounting for $98.5 million. Concurrently, the company announced key leadership changes, including the appointment of Ryan Barretto as the new Chief Executive Officer. Baird maintained a neutral rating on Sprout Social, while KeyBanc downgraded the company due to concerns over weaker bookings and the company's transition to prioritizing annual contracts. Sprout Social ended the quarter with $93.2 million in cash, cash equivalents, and marketable securities, and projects a non-GAAP operating income between $6.5 million and $7.5 million for Q3, and between $28 million to $29 million for the full year 2024. These developments reflect Sprout Social's commitment to maintaining a robust governance structure and ensuring continuity in leadership.
InvestingPro Insights
To provide additional context to Joseph Del Preto's recent stock sale, let's examine some key financial metrics and insights from InvestingPro for Sprout Social (NASDAQ:SPT).
According to InvestingPro data, Sprout Social currently has a market capitalization of $1.59 billion. The company has demonstrated strong revenue growth, with a 29.64% increase in the last twelve months as of Q2 2024, reaching $375.3 million. This growth trend is consistent with the company's performance, as revenue grew by 25.32% in Q2 2024 compared to the same quarter in the previous year.
One of the InvestingPro Tips highlights Sprout Social's impressive gross profit margins, which stand at 77.09% for the last twelve months as of Q2 2024. This high margin suggests that the company has strong pricing power and efficient cost management in its core operations.
However, it's worth noting that Sprout Social is not currently profitable, with a negative operating income of $67.95 million over the last twelve months. This aligns with another InvestingPro Tip indicating that the company has not been profitable over the past year. Despite this, analysts predict that Sprout Social will become profitable this year, which could explain why insiders like Del Preto might be adjusting their holdings.
The stock's performance has been challenging recently, with InvestingPro data showing a significant 50.79% decline over the past six months. This downturn might be influencing insider trading decisions and could be a factor in Del Preto's recent sale.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Sprout Social, providing a deeper understanding of the company's financial health and market position.
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