Sprout Social (NASDAQ:SPT) Shares Gap Down on Disappointing Earnings

Sprout Social, Inc. (NASDAQ:SPT)’s stock price gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $27.25, but opened at $26.12. Sprout Social shares last traded at $26.51, with a volume of 173,202 shares.

The company reported ($0.20) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.15 by ($0.35). Sprout Social had a negative net margin of 17.24% and a negative return on equity of 40.94%. The firm had revenue of $107.09 million during the quarter, compared to analyst estimates of $106.74 million.

Analyst Ratings Changes

A number of brokerages have weighed in on SPT. Piper Sandler lowered their price objective on Sprout Social from $29.00 to $27.00 and set a “neutral” rating on the stock in a report on Wednesday. Needham & Company LLC dropped their price objective on Sprout Social from $55.00 to $32.00 and set a “buy” rating on the stock in a report on Wednesday. Morgan Stanley increased their price objective on Sprout Social from $36.00 to $37.00 and gave the stock an “equal weight” rating in a research report on Monday, January 13th. Barclays decreased their target price on shares of Sprout Social from $38.00 to $34.00 and set an “overweight” rating on the stock in a research report on Wednesday. Finally, Scotiabank began coverage on shares of Sprout Social in a report on Monday, November 18th. They issued a “sector perform” rating and a $28.00 price target for the company. One investment analyst has rated the stock with a sell rating, seven have assigned a hold rating and seven have assigned a buy rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of “Hold” and an average target price of $36.92.

Insider Transactions at Sprout Social

In other news, insider Justyn Russell Howard sold 40,000 shares of Sprout Social stock in a transaction dated Wednesday, January 15th. The shares were sold at an average price of $31.67, for a total transaction of $1,266,800.00. Following the completion of the sale, the insider now directly owns 27,136 shares in the company, valued at $859,397.12. The trade was a 59.58 % decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, CEO Ryan Paul Barretto sold 13,465 shares of the business’s stock in a transaction that occurred on Tuesday, December 3rd. The shares were sold at an average price of $31.45, for a total transaction of $423,474.25. Following the completion of the transaction, the chief executive officer now directly owns 546,343 shares of the company’s stock, valued at approximately $17,182,487.35. This represents a 2.41 % decrease in their position. The disclosure for this sale can be found here. Insiders sold a total of 120,265 shares of company stock valued at $3,837,006 in the last ninety days. Corporate insiders own 10.97% of the company’s stock.

Institutional Trading of Sprout Social

Hedge funds and other institutional investors have recently bought and sold shares of the company. Stifel Financial Corp boosted its holdings in shares of Sprout Social by 0.4% during the fourth quarter. Stifel Financial Corp now owns 83,141 shares of the company’s stock worth $2,553,000 after purchasing an additional 351 shares during the last quarter. Invesco Ltd. boosted its stake in Sprout Social by 1.8% in the 4th quarter. Invesco Ltd. now owns 22,861 shares of the company’s stock worth $702,000 after buying an additional 397 shares during the last quarter. Quarry LP grew its holdings in Sprout Social by 100.9% in the 3rd quarter. Quarry LP now owns 1,573 shares of the company’s stock valued at $46,000 after buying an additional 790 shares during the period. Assetmark Inc. increased its stake in shares of Sprout Social by 27.5% during the 3rd quarter. Assetmark Inc. now owns 3,717 shares of the company’s stock valued at $108,000 after acquiring an additional 801 shares during the last quarter. Finally, Franklin Resources Inc. increased its stake in shares of Sprout Social by 5.4% during the 3rd quarter. Franklin Resources Inc. now owns 20,256 shares of the company’s stock valued at $576,000 after acquiring an additional 1,034 shares during the last quarter.

Sprout Social Stock Performance

The firm has a market capitalization of $1.52 billion, a PE ratio of -22.05 and a beta of 1.06. The company’s fifty day moving average price is $31.83 and its two-hundred day moving average price is $30.55. The company has a debt-to-equity ratio of 0.19, a quick ratio of 0.96 and a current ratio of 0.96.

About Sprout Social

Sprout Social, Inc designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action.