What happened

At one point, shares of Beauty Health (SKIN 3.19%) were down as much as 14% for this week, according to data provided by S&P Global Market Intelligence. However, the stock is finishing the week out strong, with a nearly 11% gain today, as of 1:50 p.m. ET.

Beauty Health reported financial results for the second quarter of 2023 late last week that disappointed the market. And it seems like investors were growing increasingly pessimistic earlier this week as they sold off shares.

As it turns out, not everyone was selling Beauty Health stock. Regulatory filings yesterday and today revealed that insiders -- directors, CEO, and CFO -- have been purchasing shares at current market prices. And the market always takes this as an extremely bullish signal.

So what

Beauty Health generates revenue from sales of its cosmetic skincare HydraFacial device. And it also generates revenue from the consumable products used by the HydraFacial machine during procedures.

In Q2, Beauty Health's net sales for consumables jumped 34% year over year to $51.9 million, clearly implying that its machines are getting used. However, revenue for its machines only climbed 1% year over year to $65.6 million.

Disappointment over this second number may be misguided. Fewer existing Beauty Health customers traded up to newer machines in Q2 compared to last year. But revenue from the sale of new machines climbed nearly 56%.

Beauty Health's business indeed appears strong. And perhaps that's why the management team took advantage of the lower stock price. For example, CEO Andrew Stanleick bought over 16,000 shares, at an average price of $6.05 per share. Stanleick now owns over 700,000 shares of Beauty Health.

Now what

On another encouraging note, Beauty Health's management reaffirmed its full-year net sales guidance for 2023, as well as reaffirmed its guidance for 2025. The company hopes to generate net sales of $460 million to $480 million this year. But in 2025, it foresees net sales of $600 million to $700 million. 

That's a lot of growth potential for Beauty Health, and it's why investors may want to join the management team in picking up shares at a discount.