Sprout Social (SPT) AI Stock Analysis

• Market Cap: $381.90M
• Dividend Yield: N/A
• Average Volume (3M): 1.66M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.21
• Revenue Growth: 13.09%
• EPS Growth: 32.34%
• Country: US
• Employees: 1,322
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.20
• Shares Outstanding: 53,179,993
• 10 Day Avg. Volume: 1,666,266
• 30 Day Avg. Volume: 1,664,959
• PEG Ratio: 0.47
• Price to Book (P/B): 3.25
• Price to Sales (P/S): 1.44
• P/FCF Ratio: 15.21
• Enterprise Value/Market Cap: 0.79
• Enterprise Value/Revenue: 0.66
• Enterprise Value/Gross Profit: 0.85
• Enterprise Value/Ebitda: -10.56
• 1Y Price Target: $10.13
• Price Target Upside: 26.63% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): 0.9
• Revenue Forecast (FY): $505.54M

• Rating: 59 Neutral
• Price Target: $6.50 ▼(-18.75% Downside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is primarily supported by improving fundamentals (strong gross margins, rising cash generation, low leverage) and a constructive earnings outlook with expanding non-GAAP profitability. It is held back by clearly bearish technicals (below major moving averages with negative MACD) and the valuation/profitability overhang implied by a negative P/E and the absence of a dividend.

Positive Factors

Recurring SaaS revenue scale

Sprout’s subscription-first SaaS model has materially scaled, delivering multi-year revenue growth and expanding contract size. Rising ACV, RPO growth and a larger share of multiyear contracts improve revenue visibility and reduce reliance on one-time sales, supporting durable recurring cashflows.

High gross margins and margin expansion

Consistently strong gross margins indicate favorable unit economics for cloud software. Recent non‑GAAP margin improvement and management guidance to ~15% exit margin imply the business can scale profitability as revenue grows, supporting sustained free cash flow conversion and reinvestment capacity.

Conservative leverage and improving cash generation

A conservatively levered balance sheet with very low absolute debt provides financial flexibility to invest in product and go-to-market priorities. Combined with materially improved operating cash flow and positive free cash flow, this strengthens the company’s runway to execute strategic initiatives without refinancing pressure.

Negative Factors

Persistent GAAP net losses

Despite improving non‑GAAP results, Sprout still reports GAAP losses and negative ROE, meaning shareholder profitability is not yet achieved. Continued GAAP losses sustain earnings risk and could limit flexibility for share-based compensation, acquisitions, or returning capital until consistent GAAP profitability is realized.

Sub-$30K cohort is a structural drag

A sizable low‑ARR segment with poor product/market fit raises long-term unit economics risk. Repositioning to self-serve or simplified SKUs may reduce costs, but the transition can depress near-term growth, lower expansion opportunities, and require sustained GTM changes before profitability benefits accrue.

Weak expansion revenue / NDR near 100%

A 100% NDR implies little net expansion from the installed base, constraining organic ARR growth and magnifying reliance on new customer acquisition. Unless expansion improves, margin and Rule-of-40 targets become harder to sustain solely via upsell, pressuring long-term growth durability.

Sprout Social Business Overview & Revenue Model

Company Description

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It provides cloud software that brings together social messaging, data, and workflows in a unified system of record, intelligence, and action. The company offers provides various integrated tools in a range of functions comprising social engagement/response, publishing, reporting and analytics, social listening and business intelligence, reputation management, employee advocacy, and automation and workflows. Its tools serve a range of use-cases within its customers' organizations, including social and community management, public relations, marketing, customer service and care, commerce, sales and customer acquisition, recruiting and hiring, product development, and business strategy. The company also offers professional services, which primarily consist of consulting and training services. It serves approximately more than 31,000 customers across small-and-medium-sized businesses, mid-market companies, enterprises, marketing agencies, government, non-profit, and educational institutions. The company was incorporated in 2010 and is headquartered in Chicago, Illinois.

How the Company Makes Money

Sprout Social generates revenue primarily through a subscription-based model, offering tiered pricing plans for its software services. These plans cater to businesses of different sizes, from small startups to large enterprises, allowing customers to choose features that align with their specific needs. Key revenue streams include monthly or annual subscriptions, add-on features, and professional services such as training and support. The company also benefits from partnerships with social media platforms and integrations with other marketing tools, which enhance its service offerings and create additional value for customers, further contributing to its earnings.

Sprout Social Financial Statement Overview

Summary

Strong revenue scaling and consistently high gross margins support the business model, while operating cash flow and free cash flow are positive and improving. The main constraint is continued GAAP net losses and historically volatile cash flow, despite clear progress toward breakeven and low leverage.

Income Statement

Revenue growth has been strong over the period (from $133M in 2020 to $458M in 2025), with an acceleration in 2025 (annual revenue growth of ~311%). Gross margin is consistently high (~74%–78%), showing solid unit economics. The key weakness is profitability: the company remains loss-making each year, though net margin improved meaningfully in 2025 (about -9% vs. about -15% in 2024), indicating progress toward breakeven but not there yet.

Balance Sheet

The balance sheet looks conservatively levered, with debt-to-equity improving sharply to ~0.07 in 2025 from ~0.51 in 2023, and equity rising to ~$203M. Total debt is low (~$15M in 2025), which reduces financial risk and provides flexibility. The main drawback is continued negative returns on equity due to net losses (ROE remains meaningfully negative), so the balance sheet strength is not yet translating into shareholder profitability.

Cash Flow

Cash generation has improved materially: operating cash flow increased to ~$43M in 2025 from ~$26M in 2024, and free cash flow is positive and growing (free cash flow growth ~33% in 2025). This is a notable strength given ongoing GAAP net losses. A key watch item is that cash flow has been volatile historically (negative operating and free cash flow in 2020), so consistency across cycles still needs to be proven.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	457.55M	405.91M	333.64M	253.83M	187.86M
Gross Profit	354.85M	314.43M	257.38M	193.97M	141.07M
EBITDA	-43.45M	-45.91M	-54.79M	-44.79M	-23.48M
Net Income	-43.33M	-61.97M	-66.43M	-50.24M	-28.70M
Balance Sheet
Total Assets	523.06M	428.34M	396.58M	293.92M	264.72M
Cash, Cash Equivalents and Short-Term Investments	95.27M	90.18M	94.41M	172.85M	176.94M
Total Debt	14.72M	43.29M	74.03M	21.79M	23.64M
Total Liabilities	319.64M	261.75M	252.39M	151.58M	119.51M
Stockholders Equity	203.42M	166.59M	144.19M	142.34M	145.21M
Cash Flow
Free Cash Flow	43.43M	23.37M	4.38M	8.82M	13.71M
Operating Cash Flow	43.43M	26.32M	6.46M	10.64M	14.63M
Investing Cash Flow	-52.15M	40.73M	-86.64M	-37.67M	-22.12M
Financing Cash Flow	15.50M	-30.32M	53.96M	-170.00K	83.00K

Sprout Social Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPT, the sentiment is Negative. The current price of 8 is above the 20-day moving average (MA) of 7.44, below the 50-day MA of 9.24, and below the 200-day MA of 13.93, indicating a bearish trend. The MACD of -0.72 indicates Negative momentum. The RSI at 32.15 is Neutral, neither overbought nor oversold. The STOCH value of 36.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPT.

Sprout Social Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXM	73 Outperform	$1.44B	13.76	21.35%	―	6.48%	168.94%
DSP	65 Neutral	$632.45M	383.71	4.45%	―	22.97%	49.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	59 Neutral	$381.90M	-8.72	-23.42%	―	13.09%	32.34%
RSKD	51 Neutral	$684.37M	-19.04	-10.54%	―	6.54%	-19.17%
BMBL	51 Neutral	$342.73M	-1.60	-25.34%	―	-7.43%	61.36%
DOMO	45 Neutral	$150.06M	-2.09	―	―	-0.14%	21.60%

Sprout Social Corporate Events

Sprout Social Reports Q4 Results and 2026 Outlook

On February 26, 2026, Sprout Social reported fourth-quarter 2025 revenue of $120.9 million, up 13% year-over-year, with total remaining performance obligations rising 15% to $404 million and current RPO up 14% to $284.7 million. The company narrowed its GAAP operating loss to $10.8 million while delivering non-GAAP operating income of $11.5 million, and generated $10.9 million in non-GAAP free cash flow alongside higher cash and equivalents of $95.3 million.

Customer momentum in larger accounts continued, with customers contributing at least $30,000 in ARR increasing 13% to 3,803 and those above $50,000 in ARR up 18% to 2,022, driving approximated trailing twelve-month subscription revenue from ≥$30,000 ARR customers up 22% in 2025 and to 59.1% of total subscription revenue. While dollar-based net retention softened to 100% overall and 102% excluding SMBs, Sprout advanced its AI roadmap with its Sprout AI capabilities and Trellis intelligence agent, and reinforced its enterprise positioning through recent large-customer wins and third-party recognition.

For the first quarter of 2026, Sprout guided to revenue of $119.9 million to $120.7 million and non-GAAP operating income of $9.2 million to $10 million, with non-GAAP EPS between $0.15 and $0.16. For full-year 2026, the company forecast revenue of $490.2 million to $495.2 million, non-GAAP operating income of $54.2 million to $59.2 million and non-GAAP EPS of $0.88 to $0.97, and set a target of reaching a roughly 15% non-GAAP operating margin by fourth-quarter 2026 and a 30% Rule of 40 metric by fourth-quarter 2027, underscoring its focus on profitable growth.

Sprout also posted an updated investor presentation on its website on February 26, 2026, indicating it may use the deck in discussions with investors and analysts but emphasizing that the materials are furnished, not filed, under U.S. securities laws. The company reiterated standard cautions that the presentation and this disclosure contain forward-looking statements subject to risks and uncertainties, and that it has no obligation to update such statements except as required by law.

The most recent analyst rating on (SPT) stock is a Buy with a $32.00 price target. To see the full list of analyst forecasts on Sprout Social stock, see the SPT Stock Forecast page.

Sprout Social Announces Upcoming CFO Transition and Search

On February 9, 2026, Sprout Social announced that Chief Financial Officer and Treasurer Joe Del Preto intends to resign effective March 11, 2026, to pursue another professional opportunity. The company emphasized that his departure is not related to any disagreement over accounting, financial reporting or operational practices and that he will not receive severance benefits for his voluntary exit.

Sprout Social’s board expressed appreciation for Del Preto’s contributions and noted that a search has begun for a permanent successor to the CFO role. The leadership transition signals a period of financial stewardship change but, according to the company’s disclosure, does not reflect underlying disputes over governance or controls, which may reassure investors and other stakeholders.

The most recent analyst rating on (SPT) stock is a Hold with a $8.50 price target. To see the full list of analyst forecasts on Sprout Social stock, see the SPT Stock Forecast page.