The Sprout Social, Inc. (NASDAQ:SPT) Annual Results Are Out And Analysts Have Published New Forecasts
Sprout Social, Inc. (NASDAQ:SPT) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The results overall were pretty much dead in line with analyst forecasts; revenues were US$334m and statutory losses were US$1.19 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Sprout Social
Taking into account the latest results, the consensus forecast from Sprout Social's 13 analysts is for revenues of US$425.8m in 2024. This reflects a sizeable 28% improvement in revenue compared to the last 12 months. Losses are expected to increase slightly, to US$1.26 per share. Before this latest report, the consensus had been expecting revenues of US$424.9m and US$1.33 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.
The average price target held steady at US$71.74, seeming to indicate that business is performing in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Sprout Social at US$80.00 per share, while the most bearish prices it at US$58.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Sprout Social'shistorical trends, as the 28% annualised revenue growth to the end of 2024 is roughly in line with the 29% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. So although Sprout Social is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$71.74, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Sprout Social going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 3 warning signs for Sprout Social (1 is a bit concerning!) that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
