On Thursday, Citi adjusted its outlook on Sprinklr Inc (NYSE:CXM) shares, a customer experience management platform, by reducing its price target to $11 from the previous $13, while maintaining a Neutral rating on the company's stock.
The decision follows Sprinklr's first-quarter earnings report for fiscal year 2025, which revealed a decline in key performance metrics such as bookings and billings, and a reduction in the full-year guidance that fell approximately 4 points below market expectations.
The company is currently navigating through changes in its go-to-market (GTM) strategy amidst a difficult demand environment that is affecting the broader software sector, particularly in customer-facing operations. These challenges have led to increased customer turnover and longer sales cycles.
In response, Sprinklr has seen a shift in its executive team, with interim Chief Operating Officer Trac Pham stepping into a Co-CEO role, alongside further adjustments to its GTM approach.
Despite the expansion of Sprinklr's product offerings, concerns persist regarding the impact of continued economic pressures on its premium-priced core services.
The company's stock performance is expected to be influenced by these factors, as well as by uncertainties surrounding the potential effects of artificial intelligence on enterprise software-as-a-service (SaaS) applications.
Citi's revised price target reflects a cautious stance on Sprinklr's near-term and long-term prospects, citing a lack of clarity and ongoing structural changes within the business. The lowered price estimate is also a result of reduced expectations for the company's financial performance in the coming years.
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