Fact based stock research
Sprout Social (NasdaqCM:SPT)
US85209W1099
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Sprout Social stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 7 (worse than 93% compared with investment alternatives), Sprout Social (Application Software, USA) shares have lower financial characteristics compared with similar stocks. Shares of Sprout Social are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives), show below-average growth (Growth Rank of 33), and are riskily financed (Safety Rank of 22), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 7, is a sell recommendation based on Sprout Social's financial characteristics. As the company Sprout Social's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 33), low growth (Obermatt Growth Rank of 33), and risky financing practices (Obermatt Safety Rank of 22), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
Latest Obermatt Ranks
Log in or sign up to see the new 360° View and Sentiment ranks.
360° Viewnew| Country | USA |
| Industry | Application Software |
| Index | NASDAQ |
| Size class | Small |
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.
Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Sprout Social
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 1 |
|
21 |
|
10 |
|
33 |
|
| GROWTH | ||||||||
| GROWTH | 100 |
|
99 |
|
93 |
|
33 |
|
| SAFETY | ||||||||
| SAFETY | 16 |
|
68 |
|
53 |
|
22 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
89 |
|
62 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
93 |
|
76 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 7 (worse than 93% compared with investment alternatives), Sprout Social (Application Software, USA) shares have lower financial characteristics compared with similar stocks. Shares of Sprout Social are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives), show below-average growth (Growth Rank of 33), and are riskily financed (Safety Rank of 22), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 7, is a sell recommendation based on Sprout Social's financial characteristics. As the company Sprout Social's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 33), low growth (Obermatt Growth Rank of 33), and risky financing practices (Obermatt Safety Rank of 22), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 1 |
|
21 |
|
10 |
|
33 |
|
| GROWTH | ||||||||
| GROWTH | 100 |
|
99 |
|
93 |
|
33 |
|
| SAFETY | ||||||||
| SAFETY | 16 |
|
68 |
|
53 |
|
22 |
|
| COMBINED | ||||||||
| COMBINED | 26 |
|
83 |
|
52 |
|
7 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Sprout Social shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Sprout Social. Price-to-Sales (P/S) is 58, which means that the stock price compared with what market professionals expect for future sales is lower than 58% of comparable companies, indicating a good value concerning to Sprout Social's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 1, meaning that dividends are expected to be lower than for 99% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 68% of alternatives (only 32% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 66% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on Sprout Social's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Sprout Social could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Sprout Social looks like an expensive investment today. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 3 |
|
15 |
|
17 |
|
58 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 12 |
|
29 |
|
1 |
|
34 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 4 |
|
15 |
|
16 |
|
32 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 1 |
|
21 |
|
10 |
|
33 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Sprout Social shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Sprout Social. Sales Growth has a rank of 71, which means that, currently, professionals expect the company to grow more than 71% of its competitors. Profit Growth with a rank of 93 is also above average. But Capital Growth has only a rank of 13, and Stock Returns with 5 are also below-average. Stock returns for Sprout Social have recently been below 95% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Sprout Social. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with the Obermatt Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 84 |
|
76 |
|
94 |
|
71 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | n/a |
|
79 |
|
92 |
|
93 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
80 |
|
79 |
|
13 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 96 |
|
81 |
|
43 |
|
5 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 100 |
|
99 |
|
93 |
|
33 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company Sprout Social has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Sprout Social is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Sprout Social. Liquidity is at 15, meaning that the company generates less profit to service its debt than 85% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 45, meaning the company has an above-average debt-to-equity ratio. It has more debt than 55% of its competitors. Finally, Refinancing is at a rank of 27 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), Sprout Social has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Sprout Social because it may suffer significantly in case of future difficulties. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 53 |
|
100 |
|
100 |
|
45 |
|
| REFINANCING | ||||||||
| REFINANCING | 45 |
|
53 |
|
27 |
|
27 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 16 |
|
1 |
|
6 |
|
15 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 16 |
|
68 |
|
53 |
|
22 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
100 |
|
91 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
64 |
|
50 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
1 |
|
26 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
90 |
|
65 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
89 |
|
62 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Sprout Social from November 14, 2024.
Obermatt Portfolio Performance
We’re so convinced about our free research, that we buy our stock tips.
See the performance of the Obermatt portfolio.