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On Wednesday, Needham reaffirmed its positive stance on Sprout Social Inc . (NASDAQ: NASDAQ:SPT), maintaining a Buy rating and a $32.00 price target for the company’s shares. Currently trading at $21.51, the stock has seen a significant 32% decline over the past six months, though InvestingPro data shows six analysts have recently revised their earnings estimates upward for the upcoming period. The endorsement follows a customer call hosted by Needham with a key executive from Caesars (NASDAQ:CZR) Entertainment, which provided insights into Sprout Social’s role in the social media marketing industry.
The call featured Bianca Shaw, the Vice President of Enterprise Social Media & Digital Reputation at Caesars Entertainment, who discussed the company’s use of Sprout Social’s technology. According to Needham’s analyst, the conversation reinforced their optimistic view on Sprout Social’s potential and the strong value it offers to marketers and operators.
Caesars Entertainment, which operates over 50 brands, is an Advanced Plan customer of Sprout Social, utilizing several of the platform’s premium modules. The effectiveness and efficiency of managing these brands through Sprout Social’s system were highlighted during the discussion.
A particular point of interest from the call was Caesars’ use of Influencer Marketing, a relatively new addition to Sprout Social’s offerings. The industry for influencer marketing is still in its early stages, and Caesars’ adoption of this feature was noted as a significant development.
Additionally, the analyst pointed out that feedback on Sprout Social’s competitive advantages was favorable. Customers appreciate the platform’s simplicity, ease of implementation, and its capacity to handle complex tasks, which were cited as key differentiators in the market.
The sustained Buy rating and price target signal confidence in Sprout Social’s trajectory within the social media marketing space, as the company continues to demonstrate its value to large enterprise customers like Caesars Entertainment. According to InvestingPro analysis, the stock appears undervalued at current levels, with analysts setting price targets ranging from $18 to $38. For deeper insights into Sprout Social’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Sprout Social Inc. reported strong financial results for the first quarter of 2025, with total revenue reaching $109.3 million, marking a 13% increase compared to the previous year. The company also achieved a record non-GAAP operating margin of 11.5%, reflecting significant growth in its financial performance. Despite this positive outcome, Oppenheimer analyst Brian Schwartz revised the price target for Sprout Social, lowering it from $38.00 to $32.00, while maintaining an Outperform rating on the stock. Schwartz highlighted record margins and cash generation but expressed concerns about the deceleration of business growth.
Sprout Social’s management has taken a cautious approach in its future guidance, influenced by current macroeconomic pressures. The company provided Q2 revenue guidance of $110.4 million to $111.2 million and full-year 2025 revenue guidance of $448.9 million to $453.9 million. Meanwhile, Sprout Social continues to expand its product offerings, including AI-powered products and strategic partnerships, which have contributed to its competitive positioning. The company’s focus on customer retention and enterprise solutions further underscores its strategic initiatives in a challenging market environment.
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