Sprout Social, Inc. (NASDAQ:SPT), a $1.84 billion market cap social media management platform company with impressive 77% gross margins and 27% year-over-year revenue growth, saw CEO Ryan Paul Barretto recently sell 13,465 shares of the company's Class A Common Stock, according to a filing with the Securities and Exchange Commission. The shares were sold at an average price of $31.45, totaling approximately $423,474. This transaction was part of an irrevocable election made in November 2022 to cover tax obligations upon the settlement of restricted stock units. While the company is not currently profitable, InvestingPro analysis shows analysts expect profitability to return this fiscal year.
Following the sale, Barretto retains direct ownership of 546,343 shares. Additionally, he indirectly holds 170,175 shares through various trusts, including the Ryan Paul Barretto 2020 Gift Trust and the Ryan Paul Barretto Revocable Trust. According to InvestingPro's Fair Value analysis, the stock currently appears undervalued despite trading at a high Price/Book multiple of 11.7x.
In other recent news, Oppenheimer's tenth annual fourth-quarter IT spending strength survey points to a normalized spending environment for IT budget growth through 2025. This led to an increase in price targets for Agilysys (NASDAQ:AGYS), Inc. and ServiceNow (NYSE:NOW), Inc. However, the survey results did not favor all IT firms equally, with Sprout Social, Inc. experiencing a lower price target and estimates.
In a separate development, Scotiabank (TSX:BNS) initiated coverage on Sprout Social with a Sector Perform rating and a price target of $28.00. The firm's analysis indicates a $5.2 billion market opportunity for the company, as it continues to expand its market reach beyond social media managers to other departments within organizations.
Sprout Social also recently announced significant financial milestones, surpassing $100 million in Q3 revenue for the first time and a 31% year-over-year growth in Remaining Performance Obligations to $220.7 million. The company secured a $1.8 million multi-year contract with a global electronics brand and projects Q4 2024 revenue to be between $106.3 million and $107.1 million. Despite restructuring in the R&D department, Sprout Social remains optimistic about its growth trajectory and strategic partnerships.
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