SPT and INSP Report
Sprout Social (SPT) beat Q2 expectations on the top and bottom lines. Revenue grew 37.4% to $61.4 million (beat by $1.09 million) while EPS of -$0.04 beat by $0.02. Full-year guidance of $253.9 - $254 million is slightly above $252.7 million and implies growth of over 35%. Management did a good job on the conference call of explaining how social media management is a different market than paid advertising (which is currently VERY lumpy) and often represents a channel where companies have more of a mission-critical view since managing social encompasses a lot of organic user traffic/growth. Bottom line, this was another good quarter, and while it probably won’t send SPT soaring it helps confirm that the business is doing well. Maintaining at hold but considering an upgrade pending stock price momentum. HOLD
Inspire Therapy (INSP) beat Q2 expectations with revenue rising 72.6% to $91.4 million (beating by $13.34 million) and EPS of -$0.53 beating by $0.07. Full-year guidance range was raised by $10 - $18 million to a range of $354 - $362 million (+52% to +55%) while gross margin guidance dips a few percentage points to 83% to 85% due to rising costs and possible inventory obsolescence as Inspire releases newer technologies. All signals still point to “go” as management is working on improved tech (like Inspire V) and is steadily growing new centers and utilization. Shares have been up and down today. I think INSP will continue to do well in the coming quarters, however we’ve had at buy for several weeks now and shares have moved higher so let’s be a little conservative, move INSP to hold, and refocus on other opportunities within our portfolio. HOLD