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Unpacking Q2 Earning: Sprout Social (NASDAQ:SPT) In The Context Of Other Sales And Marketing Software Stocks


Adam Hejl /
2021/10/18 6:14 am EDT
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As we reflect back on the just completed Q2 sales and marketing software sector earnings season, we dig into the relative performance of Sprout Social (NASDAQ:SPT) and its peers.

The Internet and the exploding amount of data have transformed how businesses interact with, market to, and transact with their customers. Personalization of offerings, e-commerce, targeted advertising and data-empowered sales teams are now table stakes for modern businesses, and sales and marketing software providers are becoming the tools of evolving customer interaction.

The 15 sales and marketing software stocks we track reported a a decent Q2; on average, revenues beat analyst consensus estimates by 3.52%, while on average next quarter revenue guidance was 2.08% above consensus. On average the share price was down 2.67% the day after the earnings.

Sprout Social (NASDAQ:SPT)

Founded by Justyn Howard and Aaron Rankin in 2010, Sprout Social provides a software as a service platform that companies can use to schedule and respond to posts on major social media networks like Twitter, Facebook, Instagram, Youtube and LinkedIn.

Sprout Social reported revenues of $44.6 million, up 42.2% year on year, beating analyst expectations by 4.36%. It was a strong quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.

“Our company is executing extraordinarily well, reinforcing confidence in our strategy and our rapidly expanding opportunity,” said Justyn Howard, Sprout Social’s CEO and co-founder.

Sprout Social Total Revenue

The stock is up 41.7% since the results and currently trades at $126.62.

Best Q2: Trade Desk (NASDAQ:TTD)

Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) offers cloud-based software that uses data to help advertisers better plan, place and target their online ads.

Trade Desk reported revenues of $279.9 million, up 100% year on year, beating analyst expectations by 6.52%. It was an exceptional quarter for the company, with a strong revenue growth and a significant improvement in gross margin.

Trade Desk Total Revenue

Trade Desk scored the fastest revenue growth among its peers. The stock is down 6.83% since the results and currently trades at $78.25.

Is now the time to buy Trade Desk? Access our full analysis of the earnings results here, it's free.

Weakest Q2: Wix (NASDAQ:WIX)

Founded in 2006 in Tel Aviv, Wix.com offers a free and easy to operate website building platform.

Wix reported revenues of $316.4 million, up 34% year on year, beating analyst expectations by 1.52%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.

The stock is down 27.7% since the results and currently trades at $187.50.

Read our full analysis of Wix's results here.

ON24 (NYSE:ONTF)

Started in 1998 as a platform to broadcast press conferences, ON24’s (NYSE:ONTF) software helps organizations organize online webinars and other virtual events and convert prospects into customers.

ON24 reported revenues of $52.1 million, up 43.4% year on year, beating analyst expectations by 2.06%. It was a weak quarter for the company, with an underwhelming full year guidance.

ON24 had the weakest full year guidance update among the peers. The stock is down 37.6% since the results and currently trades at $20.10.

Read our full, actionable report on ON24 here, it's free.

Yext (NYSE:YEXT)

Founded in 2006 by Howard Lerman, Yext offers software as a service that helps their clients manage and monitor their online listings and customer reviews across all relevant databases, from Google Maps to Alexa or Siri.

Yext reported revenues of $98.1 million, up 11.4% year on year, beating analyst expectations by 3.23%. It was a weaker quarter for the company, with a decline in gross margin and a slow revenue growth.

Yext had the slowest revenue growth among the peers. The company added 100 customers to a total of 2,600. The stock is down 17.4% since the results and currently trades at $11.50.

Read our full, actionable report on Yext here, it's free.

The author has no position in any of the stocks mentioned