Sprout Social, Inc. Fundamental Analysis (NASDAQ: SPT)
Sprout Social, Inc. (NASDAQ: SPT) shows moderate financial fundamentals with a PE ratio of -20.61, profit margin of -6.13%, and ROE of -14.05%. The company generates $0.5B in annual revenue with strong year-over-year growth of 12.72%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 19.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SPT's fundamental strength across five key dimensions:
Efficiency Score
WeakSPT struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSPT trades at attractive valuation levels.
Growth Score
ExcellentSPT delivers strong and consistent growth momentum.
Financial Health Score
ExcellentSPT maintains a strong and stable balance sheet.
Profitability Score
WeakSPT struggles to sustain strong margins.
Key Financial Metrics
Is SPT Expensive or Cheap?
P/E Ratio
SPT trades at -20.61 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SPT's PEG of -0.29 indicates potential undervaluation.
Price to Book
The market values Sprout Social, Inc. at 2.72 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -60.39 times EBITDA. This is generally considered low.
How Well Does SPT Make Money?
Net Profit Margin
For every $100 in sales, Sprout Social, Inc. keeps $-6.13 as profit after all expenses.
Operating Margin
Core operations generate -5.80 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-14.05 in profit for every $100 of shareholder equity.
ROA
Sprout Social, Inc. generates $-5.66 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Sprout Social, Inc. produces operating cash flow of $53.79M, showing steady but balanced cash generation.
Free Cash Flow
Sprout Social, Inc. generates strong free cash flow of $51.96M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.86 in free cash annually.
FCF Yield
SPT converts 8.44% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-20.61
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.29
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.72
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.29
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.06
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.03
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.14
vs 25 benchmark
ROA
Return on assets percentage
-0.06
vs 25 benchmark
ROCE
Return on capital employed
-0.10
vs 25 benchmark
How SPT Stacks Against Its Sector Peers
| Metric | SPT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -20.61 | 34.00 | Better (Cheaper) |
| ROE | -14.05% | 783.00% | Weak |
| Net Margin | -6.13% | -3153.00% (disorted) | Weak |
| Debt/Equity | 0.06 | 0.60 | Strong (Low Leverage) |
| Current Ratio | 1.03 | 12.44 | Neutral |
| ROA | -5.66% | 336.00% | Weak |
SPT outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Sprout Social, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
201.55%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-19.93%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
435.19%
Industry Style: Growth, Innovation, High Beta
High Growth