Sprout Social (SPT) AI Stock Analysis

• Market Cap: $1.31B
• Dividend Yield: N/A
• Average Volume (3M): 728.49K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.55
• Revenue Growth: 17.79%
• EPS Growth: 16.49%
• Country: US
• Employees: 1,322
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 0.22
• Shares Outstanding: 51,886,253
• 10 Day Avg. Volume: 680,117
• 30 Day Avg. Volume: 728,487
• PEG Ratio: -0.83
• Price to Book (P/B): 21.66
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 348.64
• Enterprise Value/Market Cap: 2.31
• Enterprise Value/Revenue: 1.90
• Enterprise Value/Gross Profit: 9.32
• Enterprise Value/Ebitda: -15.11
• 1Y Price Target: $27.13
• Price Target Upside: 27.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 66 Neutral
• Price Target: $23.50 ▲(10.38%Upside)

Sprout Social's overall score is driven primarily by its strong earnings call performance, which highlighted robust revenue growth and strategic wins. However, persistent profitability issues, negative valuation metrics, and mixed technical indicators tempered the score. The company's improving cash flow and strategic focus on high-value customers offer potential for future growth.

Positive Factors

Financial Performance

Sprout Social reported a strong Q1 performance with revenue beating guidance by 1.6% and a higher than expected operating margin.

Market Opportunity

A positive tone from management on the market opportunity, competitive position, and ability to execute was sensed.

Operational Improvements

Sprout has shown operational improvements in the things it can control to stabilize the business and set it up for a reacceleration as its market headwinds fade.

Negative Factors

Growth Concerns

CRPO-based bookings have continued to slow, raising concerns about the recovery of growth rates.

Revenue Growth Challenges

Decelerating revenue growth to ~14% yoy continues to be emblematic of challenges the company has faced reorienting the business upmarket while elevated customer budget scrutiny impacts deal conversion.

Selling Environment

The selling environment in the social media management space remains challenging due to budget pressures.

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 makes money primarily through a subscription-based revenue model. Customers pay for access to its suite of social media management tools and services, typically on a monthly or annual basis. Key revenue streams include subscription fees from various pricing tiers and plans that cater to different business sizes, ranging from small businesses to large enterprises. Additionally, Sprout Social may generate revenue from professional services, such as onboarding, training, and custom analytics solutions. The company benefits from strategic partnerships with social media platforms, enhancing its product offerings and integration capabilities, which contributes to customer retention and growth.

Sprout Social Financial Statement Overview

Summary

Sprout Social shows robust revenue growth and a strong balance sheet with low leverage. However, persistent net losses and profitability challenges remain concerns. Improving cash flow is a positive sign, yet sustained improvement in profitability is necessary for long-term financial health.

Income Statement

Sprout Social has shown commendable revenue growth, increasing from $132.95M in 2020 to $418.41M in TTM. The gross profit margin remains robust at 77.55% for TTM, which is strong for the software industry. However, consistent net losses, with a net profit margin of -14.24% in TTM, and negative EBIT and EBITDA margins indicate ongoing profitability challenges.

Balance Sheet

The company maintains a solid equity base with a debt-to-equity ratio of 0.10 in TTM, reflecting low leverage. The equity ratio is strong at 41.27%, indicating a stable capital structure. However, ongoing net losses could pressure equity if not addressed.

Cash Flow

Sprout Social's cash flow is improving with a positive operating cash flow of $33.26M in TTM, and free cash flow has grown significantly. The operating cash flow to net income ratio is positive, indicating healthy cash generation relative to net losses. However, sustaining cash flow growth is crucial to offset persistent net losses.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
418.41M	405.91M	333.64M	253.83M	187.86M	132.95M
	Gross Profit
324.53M	314.43M	257.38M	193.97M	141.07M	98.03M
	EBIT
-58.27M	-60.36M	-69.28M	-51.68M	-28.09M	-32.00M
	EBITDA
-47.34M	-45.91M	-54.79M	-44.79M	-23.48M	-25.88M
	Net Income Common Stockholders
-59.62M	-61.97M	-66.43M	-50.24M	-28.70M	-31.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
101.90M	90.18M	94.41M	172.85M	176.94M	163.88M
	Total Assets
424.66M	428.34M	396.58M	293.92M	264.72M	239.67M
	Total Debt
17.46M	43.29M	74.03M	21.79M	23.64M	25.79M
	Net Debt
-83.44M	-43.15M	24.27M	-58.13M	-83.47M	-88.72M
	Total Liabilities
249.35M	261.75M	252.39M	151.58M	119.51M	87.57M
	Stockholders Equity
175.31M	166.59M	144.19M	142.34M	145.21M	152.10M
Cash Flow		Free Cash Flow
31.40M	23.37M	4.38M	8.84M	13.89M	-15.37M
	Operating Cash Flow
33.26M	26.32M	6.46M	10.67M	14.82M	-11.35M
	Investing Cash Flow
22.07M	40.73M	-86.64M	-37.67M	-22.12M	-53.80M
	Financing Cash Flow
-23.85M	-30.32M	53.96M	-193.00K	-100.00K	44.36M

Sprout Social Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 21.29
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 21.29 is below the 20-day moving average (MA) of 22.17, below the 50-day MA of 21.39, and below the 200-day MA of 27.45, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 43.72 is Neutral, neither overbought nor oversold. The STOCH value of 65.32 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	80 Outperform	$2.29B	21.52	17.50%	―	6.75%	97.06%
SEMR	66 Neutral	$1.51B	207.53	2.81%	―	22.75%	-47.45%
SPT	66 Neutral	$1.31B	―	-36.95%	―	17.79%	16.49%
JAMF	63 Neutral	$1.40B	―	-6.48%	―	10.75%	56.37%
AMPL	63 Neutral	$1.66B	―	-32.87%	―	8.56%	-4.21%
Sector *	62 Neutral	$11.93B	10.60	-7.51%	3.00%	7.40%	-8.09%
ENFN	56 Neutral	$1.39B	527.45	4.45%	―	15.51%	-55.49%

Sprout Social Corporate Events

Sprout Social Holds 2025 Annual Stockholders Meeting

On May 22, 2025, Sprout Social, Inc. held its 2025 Annual Meeting of Stockholders where three key proposals were voted on. The election of three Class III directors was confirmed, PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025, and the compensation of the Company’s named executive officers was approved by an advisory vote.

The most recent analyst rating on (SPT) stock is a Buy with a $42.00 price target. To see the full list of analyst forecasts on Sprout Social stock, see the SPT Stock Forecast page.

Sprout Social Reports Q1 2025 Financial Results

On May 8, 2025, Sprout Social announced its financial results for the first quarter of 2025, highlighting a 13% revenue growth to $109.3 million and a 21% increase in current remaining performance obligations. The company reported a GAAP net loss of $11.2 million, an improvement from the previous year, and a non-GAAP net income of $12.5 million. Sprout Social’s strategic focus includes deepening customer adoption and scaling through partnerships, with significant growth in customers contributing over $50,000 in annual recurring revenue. The company also introduced enhancements to its Influencer Marketing platform, celebrating its 15th anniversary. Looking forward, Sprout Social projects continued revenue growth and profitability expansion for the second quarter and full year of 2025.