Maintaining Buy Rating: Sprout Social’s Continued Upper Market Growth and Strategic Optimism Despite Uncertainties

Analyst Scott Berg of Needham maintained a Buy rating on Sprout Social (SPT – Research Report), retaining the price target of $75.00.

Scott Berg has given his Buy rating due to a combination of factors that suggest Sprout Social maintains a positive demand trajectory, particularly in the upper market segment. Berg anticipates that while there is some uncertainty due to potential legislative actions affecting TikTok—a social channel whose influence on Sprout Social’s business is not fully quantified—the company’s core growth metrics remain robust.
Moreover, Berg expects that Sprout Social’s Annual Recurring Revenue (ARR) growth might not fully reflect the company’s underlying growth due to the shedding of non-core elements. Seasonal variations are predicted to impact Social Studio additions, but year-over-year comparisons may still show an increase due to larger customer conversions. Berg is also looking forward to insights from the promotion of Ryan Barretto, which could provide additional strategic benefits to the company’s operations.

In another report released on April 18, Oppenheimer also initiated coverage with a Buy rating on the stock with a $76.00 price target.

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Sprout Social (SPT) Company Description:

Sprout Social, Inc. provides online social media management tools for businesses. It offers communication tools, contact management, lead generation, and analytics services. The company offers solutions for enterprises, agencies, small businesses, customer service, social media marketing, and employee advocacy sectors. Sprout Social was founded by Justyn Howard, Aaron Rankin and Gilbert Lara in 2010 and is headquartered in Chicago, IL.