Jason Bliss, Chief Administrative Officer at SolarWinds SWI, disclosed an insider sell on November 6, according to a recent SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Wednesday showed that Bliss sold 135,000 shares of SolarWinds. The total transaction amounted to $1,757,700.

The latest update on Wednesday morning shows SolarWinds shares up by 0.45%, trading at $13.47.

Get to Know SolarWinds Better

SolarWinds Corp is a provider of information technology (IT), and management software. Company offers full-stack observability solutions. The company’s business is focused on building products that enable technology professionals and leaders to securely monitor and manage the performance of their IT environments, whether on-premises, in the cloud or in hybrid deployments. The products offered are designed to monitor and manage networks, systems, databases and applications across on-premises, multi-cloud and hybrid IT environments without the need for customization or professional services.

SolarWinds: Financial Performance Dissected

Positive Revenue Trend: Examining SolarWinds’s financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 5.5% as of 30 September, 2024, showcasing a substantial increase in top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Information Technology sector.

Key Profitability Indicators:

• Gross Margin: Achieving a high gross margin of 89.49%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): SolarWinds’s EPS is below the industry average. The company faced challenges with a current EPS of 0.07. This suggests a potential decline in earnings.

Debt Management: With a below-average debt-to-equity ratio of 0.92, SolarWinds adopts a prudent financial strategy, indicating a balanced approach to debt management.

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: The current P/E ratio of 60.95 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: With a P/S ratio of 2.93 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): At 12.47, SolarWinds’s EV/EBITDA ratio reflects a below-par valuation compared to industry averages signalling undervaluation

Market Capitalization Analysis: The company’s market capitalization is above the industry average, indicating that it is relatively larger in size compared to peers. This may suggest a higher level of investor confidence and market recognition.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

Understanding the Significance of Insider Transactions

Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.

When discussing legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Understanding Crucial Transaction Codes

When analyzing transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase,while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of SolarWinds’s Insider Trades.

Insider Buying Alert: Profit from C-Suite Moves

Benzinga Edge reveals every insider trade in real-time. Don’t miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. Click here for access.

This article was generated by Benzinga’s automated content engine and reviewed by an editor.