Sprinklr Inc. (CXM) shares tumbled to a 52-week low of $8.25, reflecting a stark downturn in investor sentiment as the company grapples with a challenging market environment. The customer experience management platform has seen its stock price significantly erode over the past year, with a 1-year change showing a steep decline of -45.7%. This latest price level underscores the hurdles Sprinklr faces as it strives to navigate through operational headwinds and a potentially cooling market for tech stocks. Investors are closely monitoring the company's strategic initiatives to rebound from this low point as the market seeks signs of a turnaround.
In other recent news, Sprinklr Inc. has experienced a series of financial developments. Rosenblatt has adjusted its stock forecast for the company, lowering the price target to $10.50 from the previous $11.00, while maintaining a Buy rating. This revision follows Sprinklr's recent quarterly report, which showed revenue surpassing expectations by $2.7 million, largely due to a 29% year-over-year growth in Professional Services. However, the company's operating margins and per-share earnings fell short of projections, with an operating margin of 8% and per-share earnings of $0.06.
Sprinklr's second quarter fiscal year 2025 financial results disclosed an 11% year-over-year increase in total revenue to $197.2 million, and a 9% growth in subscription revenue, reaching $177.9 million. Despite market challenges and increased churn rates, Sprinklr continues to attract new customers, including UBS, Ford (NYSE:F), T-Mobile, Grupo Bimbo, and Planet Fitness (NYSE:PLNT). The company has also updated its revenue guidance for the fiscal year 2025, primarily driven by anticipated growth in Professional Services.
In the recent earnings call, Sprinklr projected total revenue for the third quarter to be between $196 million and $197 million, with subscription revenue estimated at $177.5 million to $178.5 million. However, the company has reduced its full-year guidance due to a $6 million reserve for accounts with implementation challenges or geographical issues. These recent developments highlight Sprinklr's focus on refining its execution and go-to-market strategy for long-term growth.
InvestingPro Insights
Sprinklr Inc. (CXM) is currently facing a pivotal moment, with its shares hitting a 52-week low. In light of this, a couple of InvestingPro Tips suggest a mixed financial outlook. On the one hand, management's aggressive share buyback could signal confidence in the company's future, while the fact that the company holds more cash than debt adds a layer of financial stability. In contrast, a significant number of analysts have revised their earnings expectations downwards for the upcoming period, indicating potential concerns about future profitability.
From a valuation standpoint, Sprinklr is trading at a P/E ratio of 38.85, which is high given its near-term earnings growth, yet the company's PEG ratio of 0.13 suggests that it may be undervalued relative to its earnings growth rate over the last twelve months leading up to Q1 2025. Despite the recent stock price hit, with a -34.13% return over the past six months, Sprinklr's revenue growth remains strong at 16.76% for the last twelve months as of Q1 2023.
Investors considering Sprinklr should note that the company does not pay a dividend, which may influence investment decisions for those seeking income as well as growth. For those interested in a deeper analysis, there are additional InvestingPro Tips available on Sprinklr, including insights on valuation multiples and profitability predictions for the year (https://www.investing.com/pro/CXM).
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