Sprout Social Intrinsic Value – SPROUT SOCIAL Announces Q2 FY2023 Earnings Results for Period Ending August 4 2023
August 10, 2023
🌥️Earnings Overview
On August 4 2023, SPROUT SOCIAL ($NASDAQ:SPT) reported its earnings results for the second quarter of FY2023, which ended on June 30 2023. Total revenue came to USD 79.3 million, showing a year-over-year growth of 29.1%. Net income for the quarter was reported to be USD -13.1 million, a decrease from the previous year’s figure of -14.6 million.
Stock Price
On Friday, SPROUT SOCIAL announced their earnings results for the second quarter of FY2023 ending August 4, 2023. The stock opened at $48.4 and closed at $46.8, representing a drop of 12.3% from the previous closing price of 53.4. This was below the analysts’ estimates and caused the markets to be bearish on the performance of SPROUT SOCIAL. The decline in the stock price was primarily due to lower than expected revenues. This was largely attributed to a slowdown in online advertising and the lack of demand for certain products and services offered by SPROUT SOCIAL. This was largely due to higher expenses caused by investments in technology and personnel costs.
However, the company also experienced some positive indicators such as higher user engagement on its platform and increased customer satisfaction metrics. Overall, SPROUT SOCIAL’s Q2 FY2023 earnings results were not what investors were expecting, causing them to pull out of the stock. The company will need to take further steps to address the issues that affected its performance if it wants to turn things around. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Sprout Social. More…
| Total Revenues | Net Income | Net Margin |
| 289.49 | -49.21 | -17.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Sprout Social. More…
| Operations | Investing | Financing |
| 18.58 | -10.37 | 0.44 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Sprout Social. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 324.48 | 175.33 | 2.68 |
Key Ratios Snapshot
Some of the financial key ratios for Sprout Social are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 35.4% | – | -16.8% |
| FCF Margin | ROE | ROA |
| 5.9% | -20.9% | -9.4% |
Analysis – Sprout Social Intrinsic Value
At GoodWhale, we recently did an analysis of the fundamentals of SPROUT SOCIAL. Using our proprietary Valuation Line, we were able to determine the intrinsic value of a SPROUT SOCIAL share to be around $97.1. Currently, however, SPROUT SOCIAL stock is traded at $46.8, which is undervalued by 51.8%. This means that investors may be able to capitalize on a great opportunity and purchase these shares at a discounted rate. We recommend further researching SPROUT SOCIAL and its potential profitability before investing in the company. More…
Peers
In the social media management software industry, Sprout Social Inc competes with OneSoft Solutions Inc, Centergistic Solutions Inc, and Freee KK. While each company offers similar solutions, Sprout Social distinguishes itself with its focus on engagement, analytics, and user-friendliness.
– OneSoft Solutions Inc ($TSXV:OSS)
OneSoft Solutions Inc. is a provider of cloud-based business management software solutions. The company offers a suite of enterprise software solutions, including financials, customer relationship management, supply chain management, and human capital management. OneSoft Solutions Inc. was founded in 1999 and is headquartered in Vancouver, Canada.
– Centergistic Solutions Inc ($TSE:4478)
Freee KK is a Japanese internet company that provides accounting software for small businesses. The company has a market cap of 169.15 billion yen and a return on equity of -18.72%. Freee KK was founded in 2010 and is headquartered in Tokyo, Japan.
Summary
Sprout Social reported total revenue of USD 79.3 million for the second quarter of FY2023, a year-over-year growth of 29.1%. Net income was USD -13.1 million in the same period, slightly improved from the previous year. On the day of the announcement, the stock price declined.
This indicates that investors were disappointed with the company’s performance, as the revenue growth and income improvement were not enough to offset their expectations. Despite the recent setback, investors should keep an eye on Sprout Social, as it has potential to generate strong returns if it can continue to grow its revenue and improve profitability.
Related Posts
Recent Posts
