Cantor Fitzgerald Starts Sprout Social Inc. (SPT) at Neutral, 'Margin gains and FCF conversion are improving with plenty of upside remaining from here'

Cantor Fitzgerald analyst Matthew VanVliet initiates coverage on Sprout Social Inc. (NASDAQ: SPT) with a Neutral rating and a price target of $24.00.

The analyst comments "Assuming coverage with a Neutral rating and $24 price target. Our PT is based on shares trading at 2.4x our CY26E revenue estimate (in-line with the current multiple). • Gaining market share in Social Media Mgmt (SMM). Although market saturation of SMM is likely higher than much of the TAM analysis might suggest, the addition of Tagger Influencer Marketing mgmt. via M&A should add enough incremental opportunity to maintain longer-term low-teens growth for several years. • Social Commerce remains the major area of growth potential, but currently it’s a waiting game. SPT is already building broad capabilities to enable greater integration with networks and commerce capabilities, but to date, the Social Networks are still in a holding pattern, trying to figure out their own strategies for how much to open platforms up to third-party platforms. This remains the most significant area of growth potential, but remains an unknown in terms of timing and magnitude. • Margin gains and FCF conversion are improving with plenty of upside remaining from here"

For an analyst ratings summary and ratings history on Sprout Social Inc. click here. For more ratings news on Sprout Social Inc. click here.

Shares of Sprout Social Inc. closed at $21.70 yesterday.

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