SPT: MAKES ME WANT TO SHOUT

Sprout Social’s price was $11.10 with a $ 670 million mkt cap, and 2027 consensus est $1.09 and 1.29x 2026 revenue est of $577million at the time of this note.

Thesis: Sprout Social has declined from highs above $ 140 to $11.10 a level where operating metrics are compelling. Software spending has taken a back seat to AI investment. But we feel social media spending is positioned to re-accelerate business next year.

Sprout Social is an all-in-one social media management platform that helps businesses streamline publishing, engagement, analytics, and listening across major networks like X, Facebook, Instagram, and LinkedIn. By centralizing these tasks, it enables businesses to save time, understand their audiences better, improve customer care, and drive real business results through unified data and workflows. It acts as a central hub for managing posts, messages, trends, and performance, making social media efforts more efficient for teams of all sizes, especially medium to large businesses and agencies. Social media attracts and engages consumers and business to business enterprise buyers and sellers more than two hours a day in the buying decision making process.

The above 5-year chart tells a story of growing into a valuation that was overbought. However, the operating metrics have improved.

Key Functions:

• Publishing & Scheduling: Plan, create, and schedule content with a visual calendar for consistent presence.

• Engagement & Customer Care: Manage messages, comments, and interactions from a unified inbox, improving customer service.

• Social Listening & Analytics: Monitor conversations, track trends, measure campaign performance, and gain actionable insights.

• Reporting: Analyze data and create reports to understand audience behavior and impact.

• Employee Advocacy: Tools to help employees share company content.

• Integrations: Connects with other tools like Salesforce and Google Analytics for a holistic view.

Other Key Slides that provide to support to a more constructive view.

Wall Street Price Target Estimates

Analyst price targets for Sprout Social vary, reflecting a range of opinions on the stock’s future performance.

• Average Price Target: $$17.64

• Highest Price Target: $$32.00

• Lowest Price Target: $$9.00

• Consensus Rating: Hold

The consensus rating of “Hold” is calculated based on recommendations from 13 brokerage firms, including six “Buy” ratings, six “Hold” ratings, and one “Sell” rating.

Recent News and Insights

• Insider Activity: A director and 10% owner of the company recently purchased over 90,000 shares, a move often interpreted as a signal of confidence in the company’s future prospects.

• Industry Recognition: Sprout Social was recently named a “Leader” in a report on influencer marketing platforms for large enterprises, which highlights its competitive positioning in a growing sector.

• Valuation: The stock is currently trading near its 52-week low of $9.16 and significantly below its 52-week high of $35.18. Some analyses suggest it is undervalued compared to its intrinsic value estimate.

Bottom Line: Sprout Social is positioned to benefit from an increased focus on social media advertising and commerce. The current focus on AI is ignoring some key AI powered potential winners.