Sprout Social: Execution Missteps Balance A Very Cheap Price (Rating Downgrade)

Gary Alexander33.41K FollowersFollow5ShareSavePlay(9min)CommentsSummarySprout Social has lost ~75% of its value in the past year amid sector-wide software selloffs and AI-driven competitive fears.I downgrade SPT to neutral, as its bargain valuation is now common in software, and execution remains shaky despite upmarket customer growth.SPT targets a 'Rule of 30' by Q4 FY27, but current net retention is flat (~100%), and expansion has stalled, weighing on growth prospects.At 0.6x EV/FY26 revenue and 8% guided growth, SPT's limited integration and AI disruption risk outweigh its deep discount. hapabapa/iStock Editorial via Getty Images So far in 2026, it wouldn't be an understatement to characterize the stock market as an incredibly challenging one to invest in. Investors have dumped shares of almost all growth stocks, preferring to load up on "old economy" namesThis article was written byGary Alexander33.41K FollowersFollowWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.