As of May 27, 2025, Sprout Social Inc has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $21.32, this represents a potential upside of -315.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -268.0% |
| Potential Upside (10-year) | -315.1% |
| Discount Rate (WACC) | 6.8% - 9.8% |
Revenue is projected to grow from $406 million in 12-2024 to $1682 million by 12-2034, representing a compound annual growth rate of approximately 15.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 406 | 22% |
| 12-2025 | 458 | 13% |
| 12-2026 | 550 | 20% |
| 12-2027 | 658 | 20% |
| 12-2028 | 784 | 19% |
| 12-2029 | 888 | 13% |
| 12-2030 | 1030 | 16% |
| 12-2031 | 1181 | 15% |
| 12-2032 | 1322 | 12% |
| 12-2033 | 1473 | 11% |
| 12-2034 | 1682 | 14% |
Net profit margin is expected to improve from -15% in 12-2024 to -9% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | (62) | -15% |
| 12-2025 | (64) | -14% |
| 12-2026 | (70) | -13% |
| 12-2027 | (78) | -12% |
| 12-2028 | (85) | -11% |
| 12-2029 | (88) | -10% |
| 12-2030 | (100) | -10% |
| 12-2031 | (113) | -10% |
| 12-2032 | (124) | -9% |
| 12-2033 | (136) | -9% |
| 12-2034 | (153) | -9% |
with a 5-year average of $2 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 3 |
| 12-2026 | 4 |
| 12-2027 | 5 |
| 12-2028 | 6 |
| 12-2029 | 7 |
| 12-2030 | 9 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 66 |
| Days Inventory | 0 |
| Days Payables | 31 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | (46) | (0) | 4 | (2) | (48) |
| 2026 | (68) | (1) | 6 | 22 | (96) |
| 2027 | (74) | (1) | 7 | 20 | (101) |
| 2028 | (80) | (1) | 9 | 19 | (108) |
| 2029 | (82) | (1) | 10 | 21 | (113) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -268.0% |
| 10-Year DCF (Growth) | 0.00 | -315.1% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 0.00 | -100.0% |
Is Sprout Social Inc (SPT) a buy or a sell? Sprout Social Inc is definitely a sell. Based on our DCF analysis, Sprout Social Inc (SPT) appears to be overvalued with upside potential of -315.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $21.32.