Sprout Social Earnings: What To Look For From SPT

Max Juang /
2023/11/01 3:05 am EDT

Social media management software company Sprout (NASDAQ:SPT) will be announcing earnings results tomorrow after market close. Here's what to expect.

Last quarter Sprout Social reported revenues of $79.3 million, up 29.1% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and full-year. The company added 284 enterprise customers paying more than $10,000 annually to a total of 7,391.

Is Sprout Social buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Sprout Social's revenue to grow 28.9% year on year to $84.2 million, slowing down from the 33% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.05 per share.

Sprout Social Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 1.58%.

Looking at Sprout Social's peers in the sales and marketing software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Freshworks delivered top-line growth of 19.3% year on year, beating analyst estimates by 1.86%, and VeriSign reported revenues up 5.44% year on year, missing analyst estimates by 0.75%. VeriSign was flat on the results, and Freshworks was up 1.9%.

Read our full analysis of Freshworks's results here and VeriSign's results here.

The whole tech sector has been facing a sell-off, and while some of the sales and marketing software stocks have fared somewhat better, they have not been spared, with share price declining 4.45% over the last month. Sprout Social is down 6.42% during the same time, and is heading into the earnings with analyst price target of $62.5, compared to share price of $43.9.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.