On Thursday, Oppenheimer maintained its Perform rating on shares of Sprinklr Inc (NYSE:CXM) following the company's financial results for the third quarter.
Sprinklr reported exceeding its profit and loss (P&L) guidance and meeting its billings guidance for the third quarter. The analysis suggests that the fourth quarter may represent the lowest point for the business as the new Chief Executive Officer (CEO) focuses on improving operational efficiency and streamlines pricing, packaging, and market strategies. This comes at a time when year-over-year comparisons are expected to become more favorable in fiscal year 2026.
Despite these positive developments, the third quarter metrics and fourth quarter guidance present challenging optics for the business. Sprinklr's growth in revenue and margins continues to be affected by several issues. According to the firm, these issues, if temporary, will require multiple quarters to resolve under the new CEO's leadership. However, there is a possibility that these challenges could be more deep-rooted, stemming from a slowdown in artificial intelligence technologies, which may reduce or replace information technology spending from service suppliers.
"There is also not enough growth to entice new investors to the name, in our view. The good news is that depressed multiples limit the downside," analysts at Oppenheimer said.
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