Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight some interesting insider buying at Verint Systems Inc (VRNT:US). Verint is a technology company that specializes in cloud-based customer engagement solutions. Operating in 175 countries worldwide, it services nearly 10,000 customers, including around 85% of the Fortune 100. It is listed on the Nasdaq Global Select Market and currently has a market capitalization of $3.58 billion.
Verint Systems Inc: Insider Buying
Our data shows that on April 13, board member Reid French picked up 4,700 VRNT shares at a price of $52.70 per share. This trade cost the insider $247,690 and increased his holding to 7,514 shares.
Mr. French – who has served as a director at Verint since June 2021 – has considerable experience in the technology sector. Previously, he was CEO of Applied Systems, the leading cloud software provider to the insurance distribution industry. Meanwhile, he has served on the boards of Autodesk, Paradigm Software, Anthology, and NetDocuments.
In addition to this, he appears to have some investment experience. Early on in his career, he managed investment banking transactions in the technology sector for investment bank Robinson-Humphrey. This background means he is likely to have a good understanding of his firm’s prospects, and investment potential.
This trade caught our eye due to the fact that insider purchases at Verint are quite rare. Our data shows that this is the first purchase from an insider since 2012. This suggests Mr. French sees value on offer at present.
Verint recently posted a strong set of fourth-quarter results for the three months ended 31 January.
For the period, cloud revenue was up 35% year on year on a non-GAAP basis (above the group’s target) while total revenue was up 4% to $236 million. Adjusted earnings per share came in at $0.57, just above the consensus forecast of $0.56. The group noted that at the end of the period, it had a record backlog of $722 million.
On the back of this good performance, Verint raised its guidance for FY2023. It now expects cloud revenue growth and total revenue growth of 30-32% and 7% respectively. It also expects diluted earnings per share of $2.50 for the year, which would represent growth of 10% year on year.
“The cloud momentum we experienced throughout last year continued into the fourth quarter. Looking ahead, we expect our cloud momentum to continue and are raising FY2023 guidance for revenue, cloud revenue growth and diluted EPS. We believe our revised outlook reflects improved visibility and the strength of our open cloud platform and AI differentiation,” commented CEO Dan Bodner.
In light of the increase to guidance here, we see the insider buying as a bullish indicator.