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Sales And Marketing Software Stocks Q3 Teardown: Sprout Social (NASDAQ:SPT) Vs The Rest


Adam Hejl /
2023/01/24 4:13 am EST
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The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Sprout Social (NASDAQ:SPT) and the rest of the sales and marketing software stocks fared in Q3.

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 25 sales and marketing software stocks we track reported a slower Q3; on average, revenues beat analyst consensus estimates by 1.67%, while on average next quarter revenue guidance was 2.42% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again, but sales and marketing software stocks held their ground better than others, with the share prices up 12.7% since the previous earnings results, on average.

Sprout Social (NASDAQ:SPT)

Founded by Justyn Howard and Aaron Rankin in 2010, Sprout Social (NASDAQ:SPT) 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 $65.3 million, up 33% year on year, in line with analyst expectations. It was a mixed quarter for the company, with strong top line growth but decelerating customer growth.

“We’re in the fortunate position to again raise our annual growth and margin guidance,” said Justyn Howard, Sprout Social’s CEO and co-founder.

Sprout Social Total Revenue

The stock is up 32.8% since the results and currently trades at $63.34.

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

Best Q3: Zeta (NYSE:ZETA)

Co-Founded by former Apple CEO, John Scully, Zeta Global (NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.

Zeta reported revenues of $152.2 million, up 32.2% year on year, beating analyst expectations by 7.94%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and solid top line growth.

Zeta Total Revenue

Zeta pulled off the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 6.79% since the results and currently trades at $8.96.

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

Slowest Q3: AppLovin (NASDAQ:APP)

Co-founded by Adam Foroughi who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is a provider of marketing and monetization tools for mobile app developers and also operates a portfolio of mobile games.

AppLovin reported revenues of $713 million, down 1.9% year on year, missing analyst expectations by 2.07%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.

The stock is down 10.4% since the results and currently trades at $12.30.

Read our full analysis of AppLovin's results here.

Sprinklr (NYSE:CXM)

Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software.

Sprinklr reported revenues of $157.2 million, up 23.7% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for the next quarter and full year missing analysts' expectations.

The company added 9 enterprise customers paying more than $1m annually to a total of 107. The stock is up 6.8% since the results and currently trades at $8.79.

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

The author has no position in any of the stocks mentioned