Scott Berg, an analyst from Needham, maintained the Buy rating on Sprout Social. The associated price target remains the same with $32.00.
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Scott Berg has given his Buy rating due to a combination of factors that highlight Sprout Social’s strong financial performance and promising future prospects. The company reported its best sales quarter in two years, with a notable revenue increase of 0.6%, which aligns with its historical performance trends. This positive outcome is further supported by improved sales metrics both quarter-over-quarter and year-over-year, indicating potential stabilization and acceleration in revenue growth in the upcoming quarters.
Additionally, Sprout Social achieved significant success in securing larger deals, with a record number of deals exceeding $200k and a substantial increase in the number of deals over $50k year-over-year. The company’s upcoming event to showcase its new AI capabilities, including the recently announced MCP, is expected to enhance product differentiation and deepen customer engagement. Furthermore, the company achieved its highest profitability to date, with operating margins reaching 11.9%, driven by efficiencies across all operational areas.