William Blair analyst Arjun Bhatia has reiterated their neutral stance on SPT stock, giving a Hold rating on July 31.
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Arjun Bhatia has given his Hold rating due to a combination of factors that reflect both the strengths and challenges facing Sprout Social. The company has shown solid performance in its core business, achieving a revenue growth of 12.5% in the second quarter, which surpassed its own guidance. This growth is attributed to strategic go-to-market and operational adjustments aimed at stabilizing the business amidst market headwinds. Additionally, Sprout Social’s acquisition of NewsWhip presents potential for cross-selling opportunities, which could further expand its market reach.
However, despite these positive developments, Bhatia notes that Sprout Social’s valuation remains a concern. The stock is trading at a discount compared to its growth peers, with a lower multiple on both revenue and EBITDA estimates for 2026. While the company has made commendable progress in improving its operational metrics, such as increasing operating margins and free cash flow, the current valuation suggests a cautious approach. Therefore, the Hold rating reflects a balanced view, acknowledging the company’s achievements while considering the competitive landscape and valuation metrics.
According to TipRanks, Bhatia is a 3-star analyst with an average return of 1.8% and a 44.13% success rate. Bhatia covers the Technology sector, focusing on stocks such as InterDigital, NICE, and Wix.
In another report released on July 31, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $20.00 price target.