Sprout Social (SPT) Reports Earnings Today. What To Expect

Anthony Lee /
2023/02/20 2:39 am EST
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Social media management software company Sprout (NASDAQ:SPT) will be announcing earnings results today after the bell. Here's what investors should know.

Last quarter 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. The company added 311 enterprise customers paying more than $10,000 annually to a total of 6,111.

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 31.1% year on year to $69.8 million, slowing down from the 42.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.02 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 has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.9%.

Looking at Sprout Social's peers in the sales and marketing software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. HubSpot delivered top-line growth of 27.1% year on year, beating analyst estimates by 5.3% and The Trade Desk reported revenues up 24% year on year, missing analyst estimates by 0.21%. HubSpot traded up 11.9% on the results, The Trade Desk was up 5.13%. Read our full analysis of HubSpot's results here and The Trade Desk's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 7.77% over the last month. Sprout Social is down 3.06% during the same time, and is heading into the earnings with analyst price target of $70.20, compared to share price of $60.99.

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.

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