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Sprout Social
(NASDAQ:SPT)
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Rating:70Outperform
Price Target:
$11.50
▲(38.22% Upside)
Action:Reiterated
Date:08/08/26
The score is driven primarily by improving fundamentals: strong and improving free cash flow, high gross margins, and low leverage, supported by earnings-call guidance pointing to meaningful non-GAAP margin expansion. Technicals are positive with strong uptrend signals, though momentum is somewhat stretched. The main constraint on the score is ongoing GAAP net losses (negative P/E) and near-term restructuring execution risk.
Positive Factors
Enterprise Customer and Contract Growth
Growing enterprise adoption, higher ACV, stronger RPO and greater multi-year contract penetration improve revenue visibility and customer durability. This mix shift can support expansion revenue and reduce reliance on smaller, potentially less stable accounts.
Negative Factors
Persistent GAAP Losses
The company has not yet achieved sustained GAAP profitability, and negative returns on equity indicate that growth has not fully translated into shareholder earnings. Further operating leverage is required, leaving execution risk around the path to durable profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Enterprise Customer and Contract Growth
Growing enterprise adoption, higher ACV, stronger RPO and greater multi-year contract penetration improve revenue visibility and customer durability. This mix shift can support expansion revenue and reduce reliance on smaller, potentially less stable accounts.
Read all positive factors
Sprout Social Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlySprout Social (SPT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$626.94M
Dividend YieldN/A
Average Volume (3M)1.21M
Price to Earnings (P/E)―
Beta (1Y)1.27
Revenue Growth11.85%
EPS Growth47.54%
CountryUS
Employees1,362
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.50
Shares Outstanding55,022,854
10 Day Avg. Volume925,706
30 Day Avg. Volume1,214,833
Financial Highlights & Ratios
PEG Ratio0.47
Price to Book (P/B)3.25
Price to Sales (P/S)1.44
P/FCF Ratio16.80
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$10.38Price Target Upside24.70% Upside
Rating ConsensusHold
Number of Analyst Covering9
EPS Forecast (FY)1.11
Revenue Forecast (FY)$494.47M
Sprout Social Business Overview & Revenue Model
Company Description
Sprout Social, Inc. delivers a comprehensive, cloud-based platform for social media management, operating across a global clientele that spans the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. This sophisticated software...
How the Company Makes Money
Sprout Social primarily makes money through recurring subscription revenue from its software-as-a-service (SaaS) platform. Customers pay for access to the platform under term-based subscription plans (typically priced per user/seat and/or by plan ...
Sprout Social Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call conveyed multiple strong operational and financial positives — double-digit revenue growth, robust margin expansion, sizable free cash flow improvement, accelerated RPO/CRPO, clear up-market traction (20% growth in $30k+ cohort and ACV +14.8%), early promising AI product adoption (Trellis) and a plan for material annualized cost savings. Offsetting these positives are meaningful near-term risks: a ~20% workforce reduction with $18M-$20M charges, ongoing pressure in the sub-$30k segment, conservative near-term guidance given the demand backdrop, and timing of realized cost savings (largely in 2027). On balance, the company is showing operational progress and a path to improved profitability while navigating near-term restructuring and lower-end market headwinds.Positive Updates
Revenue Growth
Total revenue of $123.8M in Q2, up 10.8% year-over-year; subscription revenue $121.9M, up 9.7% year-over-year.
Negative Updates
Workforce Reduction and One-time Charges
Announced a headcount reduction of approximately 20%; expects pre-tax restructuring charges of ~$18M-$20M (substantially all impacting Q3), creating near-term disruption and change-management risk.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Total revenue of $123.8M in Q2, up 10.8% year-over-year; subscription revenue $121.9M, up 9.7% year-over-year.
Read all positive updates
Company Guidance
Sprout guided Q3 FY2026 revenue of $123.3M–$124.1M, non‑GAAP operating income of $17.5M–$18.3M and non‑GAAP EPS of $0.29–$0.30 (assuming ~60.7M weighted average basic shares). For fiscal 2026 it expects revenue of $493.0M–$495.6M, non‑GAAP operating income of $68.3M–$70.3M (about a 20% increase versus the prior outlook midpoint) and non‑GAAP EPS of $1.11–$1.15 (assuming ~60.6M shares), and it expects to exit Q4 with a non‑GAAP operating margin near 17%; guidance excludes any impact from the $50M share‑repurchase program. The company said it will incur pre‑tax restructuring charges of ~$18M–$20M (mostly in Q3), expects at least $50M of annualized non‑GAAP cost savings (fully realized in 2027), reaffirmed a Rule of 40 target of 30% by Q4 FY2027, and noted it is lapping the NewsWhip acquisition (a headwind to revenue and RPO) and is not assuming an improvement in the demand environment.Sprout Social Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
74
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 481.82M | 457.55M | 405.91M | 333.64M | 253.83M | 187.86M |
| Gross Profit | 373.15M | 354.85M | 314.43M | 257.38M | 193.97M | 141.07M |
| EBITDA | -12.02M | -27.91M | -45.91M | -54.79M | -44.79M | -23.48M |
| Net Income | -29.55M | -43.33M | -61.97M | -66.43M | -50.24M | -28.70M |
Balance Sheet | ||||||
| Total Assets | 522.22M | 523.06M | 428.34M | 396.58M | 293.92M | 264.72M |
| Cash, Cash Equivalents and Short-Term Investments | 119.93M | 95.27M | 90.18M | 94.41M | 172.85M | 176.94M |
| Total Debt | 13.38M | 66.77M | 43.29M | 74.03M | 21.79M | 23.64M |
| Total Liabilities | 293.67M | 319.64M | 261.75M | 252.39M | 151.58M | 119.51M |
| Stockholders Equity | 228.55M | 203.42M | 166.59M | 144.19M | 142.34M | 145.21M |
Cash Flow | ||||||
| Free Cash Flow | 52.08M | 39.32M | 23.37M | 4.38M | 8.82M | 13.71M |
| Operating Cash Flow | 53.92M | 43.43M | 26.32M | 6.46M | 10.64M | 14.63M |
| Investing Cash Flow | -55.35M | -52.15M | 40.73M | -86.64M | -37.67M | -22.12M |
| Financing Cash Flow | 17.75M | 15.50M | -30.32M | 53.96M | -170.00K | 83.00K |
Sprout Social Technical Analysis
Positive
8.32
Price Trends
8.40
Positive
7.39
Positive
8.10
Positive
Market Momentum
0.52
Negative
64.59
Neutral
67.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPT, the sentiment is Positive. The current price of 8.32 is below the 20-day moving average (MA) of 9.41, below the 50-day MA of 8.40, and above the 200-day MA of 8.10, indicating a bullish trend. The MACD of 0.52 indicates Negative momentum. The RSI at 64.59 is Neutral, neither overbought nor oversold. The STOCH value of 67.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPT.
Sprout Social Risk Analysis
Sprout Social disclosed 50 risk factors in its most recent earnings report. Sprout Social reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sprout Social Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.74B | 64.55 | 5.25% | ― | 8.10% | -73.21% | |
71 Outperform | $814.42M | 91.96 | 11.42% | ― | 21.99% | 271.66% | |
70 Outperform | $626.94M | -20.68 | -14.05% | ― | 11.85% | 47.54% | |
68 Neutral | $785.62M | -55.40 | -5.70% | ― | 9.63% | 55.51% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
52 Neutral | $376.11M | -0.74 | -110.37% | ― | -13.33% | 45.52% | |
48 Neutral | $176.86M | -2.83 | 29.35% | ― | 0.35% | 29.79% |
* Technology Sector Average
SPT
Sprout Social
10.69
-4.55
-29.86%
DOMO
Domo
3.72
-12.39
-76.91%
DSP
Viant Technology
12.31
2.21
21.83%
BMBL
Bumble
2.84
-3.61
-55.97%
CXM
Sprinklr
7.47
-0.90
-10.75%
RSKD
Riskified
5.94
1.38
30.26%
Sprout Social Corporate Events
Business Operations and StrategyFinancial Disclosures
Sprout Social posts solid Q2 growth and profitability
Positive
Aug 6, 2026
Sprout Social reported second-quarter 2026 results on August 6, 2026, highlighting 11% year-over-year revenue growth to $123.8 million and improving profitability, with non-GAAP operating income rising to $16.0 million and GAAP operating loss narr...
Business Operations and StrategyExecutive/Board Changes
Sprout Social Founder Returns as CTO to Drive AI
Positive
Jun 10, 2026
On June 10, 2026, Sprout Social announced that company founder and director Aaron Rankin will return as Chief Technology Officer, effective August 3, 2026, while retaining his board seat. Current CTO Alan Boyce, who has been with the company for n...
Executive/Board ChangesShareholder Meetings
Sprout Social Shareholders Back Board, Pay and Auditor
Positive
May 20, 2026
At its 2026 Annual Meeting of Stockholders held on May 20, 2026, Sprout Social shareholders elected two Class I directors, Peter Barris and Karen Walker, to serve until the 2029 annual meeting, reinforcing continuity in the company’s board l...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.