Why Sprinklr stock is in focus after its latest earnings and guidance
Sprinklr (CXM) came back into focus for investors after its latest quarterly earnings and updated full year revenue guidance, which showed modest revenue growth and a mixed profit picture.
The company reported second quarter revenue of US$213.74 million compared with US$212.04 million a year earlier, while net income for the period declined to US$7.12 million from US$12.62 million.
Sprinklr's latest earnings and modest full year revenue guidance reset have come alongside sharp share price moves, with the stock down 10.22% on a 1 day basis and 21.41% over 7 days, yet still showing a 90 day share price return of 15.99% while the 1 year total shareholder return is down 20.31%. This suggests that short term momentum has faded even as some investors reassess longer term prospects around its AI focused offerings and execution on services profitability.
Spot similar AI focused stories in customer experience software by scanning our hand picked 71 profitable AI stocks that aren't just burning cash , which pair revenue traction with positive earnings.
After a sharp pullback and modest revenue outlook reset, Sprinklr now sits at a very different entry price than it did just a few weeks ago. Does that make it sensible to consider an investment today, or would it be more prudent to wait for potentially more favorable terms?
Most Popular Narrative: 26% Undervalued
Sprinklr's most followed valuation narrative places fair value at $8.44 compared with the last close at $6.24, which frames the recent sell off in a very different light.
Sprinklr's accelerated integration and deployment of advanced AI functionality across its Marketing, Insights, and CCaaS products is enabling customers to harness actionable insights from complex, unstructured data, directly benefiting from the broader enterprise demand for AI powered analytics and automation. This supports higher platform adoption, customer expansion, and ultimately improves both revenue growth and net margins over time.
Want to see what kind of revenue run rate and margin profile that AI push is aiming for? The narrative leans on specific growth and profitability paths that are not obvious from headline guidance alone.
Result: Fair Value of $8.44 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Sprinklr still faces risks around customer concentration and rising AI related infrastructure costs, which could pressure revenue stability and margins if these risks worsen.
Find out about the key risks to this Sprinklr narrative.
Another View on Sprinklr using earnings multiples
The earlier fair value of $8.44 paints Sprinklr as undervalued. However, the current P/E of 63.1x is roughly double the US Software industry at 31x and also above peers at 44.1x. It also sits well above the fair ratio of 37.9x. That gap could mean valuation risk if sentiment cools.
For a closer look at how this pricing compares across earnings multiples and what it could mean for your risk tolerance, See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
If the mixed signals around Sprinklr leave you uncertain, use that urgency to look through the full picture of risks and potential rewards. To see both sides set out clearly, review the 2 key rewards and 2 important warning signs
Looking for more investment ideas beyond Sprinklr?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CXM .
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