Sprinklr, Inc. (NYSE:CXM): A Deep Dive into the Company's Share Price and Valuation

We are pleased to present our analysis of Sprinklr, Inc. (NYSE:CXM), a leading enterprise cloud software provider, focusing on the company's share price and valuation. Sprinklr operates a unified customer experience management (Unified-CXM) platform, enabling customer-facing teams to collaborate across internal silos, communicate across digital channels, and leverage a complete suite of capabilities to deliver customer experiences.

Sprinklr's Share Price Performance

Sprinklr's share price has been volatile in recent months, with a substantial price increase over the last few months, followed by a recent pullback. As of December 26, 2024, Sprinklr's stock price is $8.95, down from its 52-week high of $14.315 but still up from its 52-week low of $6.91. The company's share price has been influenced by various factors, including analyst ratings, earnings reports, and market sentiment.

Analyst Ratings and Price Targets

As of December 26, 2024, Sprinklr has an average analyst rating of "Hold" from 15 analysts, with a 12-month price target of $9.89. This indicates that analysts believe Sprinklr's stock is likely to perform similarly to the overall market, with a potential increase of 10.56% from the current stock price of $8.95.

One notable downgrade occurred on December 11, 2024, when JP Morgan downgraded Sprinklr from "Buy" to "Hold" and reduced its price target from $11 to $10. This downgrade may have contributed to a slight decrease in Sprinklr's share price, as seen in the historical data. However, Sprinklr's share price has generally trended upward over the past year, despite the downgrade.

Another important factor to consider is the wide range of price targets provided by analysts, which can influence investor sentiment and trading activity. For example, Patrick Walravens of JMP Securities has a price target of $17, indicating a significant upside potential for Sprinklr's stock. On the other hand, Allan Verkhovski of Scotiabank has a lower price target of $8.5, which may deter some investors from buying the stock at its current price.

Earnings Reports and Guidance

Sprinklr's earnings reports and guidance have had a significant impact on its stock price. The company's Q3 2025 earnings report, released on December 4, 2024, showed strong results, with revenue and earnings per share (EPS) exceeding analyst expectations. This positive news led to an increase in Sprinklr's stock price, from $8.46 at the close of trading on December 3, 2024, to $8.64 at the close of trading on December 4, 2024, representing a 4.73% increase. Additionally, Sprinklr's guidance for the full year 2025, which was also released in the Q3 earnings report, indicated that the company expects to achieve revenue growth of 10% and EPS growth of 81%. This positive outlook further boosted Sprinklr's stock price, which continued to rise in the following days.

Valuation Metrics

Sprinklr's valuation metrics suggest that the company's stock price may be relatively expensive compared to its earnings. The company's P/E ratio is 59.73333, which is significantly higher than the average P/E ratio of its software industry peers. The average P/E ratio for the software industry is around 20-25, depending on the specific sector and the overall market conditions. This high P/E ratio indicates that Sprinklr's stock price is relatively expensive compared to its earnings, and investors may be paying a premium for the company's growth prospects.

Growth Prospects

Sprinklr's earnings growth rate is expected to be 26% over the next few years, which is highly optimistic. This growth should lead to more robust cash flows, feeding into a higher share value. However, it's important to compare this growth rate to its peers to understand its relative performance. According to the article, Sprinklr's growth initiatives have not been performing as well as expected, which could be a reason for its muted growth outlook compared to its peers. Despite this, the company's growth initiatives have shown early positive signs in its 3Q25 earnings, which could indicate a turnaround in its growth trajectory.

Revenue Growth Rate

Sprinklr's revenue growth rate has been relatively stable over the past few years, with an average annual growth rate of around 9.5%. However, this growth rate is lower than some of its peers in the software industry. For example, the average revenue growth rate for the S&P 500 software industry is around 12% per year.

Looking ahead, Sprinklr's expected revenue growth rate for the next few years is around 3.6% for 2025, 6.6% for 2026, and 6.5% for 2027. These growth rates are lower than the historical average and the industry average, indicating that Sprinklr may face some challenges in maintaining its revenue growth in the coming years.

Conclusion

Sprinklr's share price has been volatile in recent months, influenced by analyst ratings, earnings reports, and market sentiment. The company's high P/E ratio and relatively low revenue growth rate compared to its peers suggest that investors may be paying a premium for Sprinklr's growth prospects. However, Sprinklr's strong earnings growth rate and positive outlook indicate that the company has the potential to deliver robust cash flows and a higher share value in the future. As always, investors should conduct their own research and consider their risk tolerance when making investment decisions.