Value
8.6/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 9.5 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 6.4x
- ▸PEG: 0.08
- ▸Attractively valued
SPT · Why this verdict
Why Sprout Social (SPT) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sprout Social pairs a perfect earnings beat streak and cheap, cash-generative valuation with a confirmed technical downtrend, thin risk/reward margin, and ongoing insider selling that the market has yet to resolve.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock trades at a 6.8x forward P/E with a 0.08 PEG ratio, and is free-cash-flow positive with a 22% FCF margin and 21.0% FCF yield despite a GAAP loss. Quality breakdown | The valuation discount should narrow as the market recognizes the strong free cash flow generation. | Tripped→Stable |
| CounterA persistently cheap multiple despite strong free cash flow could reflect market skepticism about the durability of that cash flow or the underlying growth rate. | ||
The current setup shows only a 4.1% upside margin, which the engine's asymmetry gate flags as failing its threshold at the current price. Bear case | The upside margin should widen if the stock re-rates or the price target is raised. | →Stable |
| CounterEven a thin nominal margin can still be attractive if downside is well-contained by the stop-loss level. | ||
The company has beaten earnings estimates in all of the last 4 quarters, with an average surprise of 34.29%. Catalyst breakdown | The beat streak should extend to a 5th consecutive quarter at the next report. | →Stable |
| CounterA large average surprise sets an increasingly difficult bar, raising the risk of disappointment even from a technical beat. | ||
The stock is below its 200-day moving average with a steep -11.7%/30-day slope, confirming a technical downtrend. Momentum breakdown | Price should reclaim the 200-day moving average over the next 2 quarters if the engine's recovery classification is accurate. | ↑Improving |
| CounterA -11.7%/30-day slope is a severe rate of decline, and the engine's own gate shows the death cross has not yet been resolved. | ||
Insiders have been net sellers over the trailing 90 days, with 5 sell transactions totaling $834,404 in net value and zero buys, a moderate-severity bearish signal. Insider | Insider selling intensity should decline or buying should resume over the next quarter. | →Stable |
| CounterThe sale total represents only 0.172% of market cap and could reflect routine equity-compensation-driven diversification. | ||
The stock trades at a 6.8x forward P/E with a 0.08 PEG ratio, and is free-cash-flow positive with a 22% FCF margin and 21.0% FCF yield despite a GAAP loss.
Tripped→StableQuality breakdown
- Expectation
- The valuation discount should narrow as the market recognizes the strong free cash flow generation.
CounterA persistently cheap multiple despite strong free cash flow could reflect market skepticism about the durability of that cash flow or the underlying growth rate.
The current setup shows only a 4.1% upside margin, which the engine's asymmetry gate flags as failing its threshold at the current price.
→StableBear case
- Expectation
- The upside margin should widen if the stock re-rates or the price target is raised.
CounterEven a thin nominal margin can still be attractive if downside is well-contained by the stop-loss level.
The company has beaten earnings estimates in all of the last 4 quarters, with an average surprise of 34.29%.
→StableCatalyst breakdown
- Expectation
- The beat streak should extend to a 5th consecutive quarter at the next report.
CounterA large average surprise sets an increasingly difficult bar, raising the risk of disappointment even from a technical beat.
The stock is below its 200-day moving average with a steep -11.7%/30-day slope, confirming a technical downtrend.
↑ImprovingMomentum breakdown
- Expectation
- Price should reclaim the 200-day moving average over the next 2 quarters if the engine's recovery classification is accurate.
CounterA -11.7%/30-day slope is a severe rate of decline, and the engine's own gate shows the death cross has not yet been resolved.
Insiders have been net sellers over the trailing 90 days, with 5 sell transactions totaling $834,404 in net value and zero buys, a moderate-severity bearish signal.
→StableInsider
- Expectation
- Insider selling intensity should decline or buying should resume over the next quarter.
CounterThe sale total represents only 0.172% of market cap and could reflect routine equity-compensation-driven diversification.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 4.1 |
| FCF quality | 8.3 |
| Moat | 7.2 |
| Rule of 40 | 5.5 |
| Piotroski F | 6.7 |
- ▸FCF-positive despite GAAP loss (FCF margin 22%, FCF yield 18.0%)
Growth
5.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 8.9 |
| OBV | 1.0 |
| MA position | 8.0 |
| Volume | 4.8 |
- ▸Overbought (RSI 70)
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 5.0 |
| Price target | 5.5 |
- ▸LLM news sentiment: +0.40 (n=3)
Insider
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider selling — $701,211 (0.121% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.6 |
| quality rank | 1.7 |
| growth rank | 4.1 |
Technical
2.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 1.8 |
| 52w position | 0.2 |
| gap | 5.0 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.6 |
| days to cover | 6.4 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 1.0 |
| beta | 7.6 |
| debt equity | 9.2 |
| news risk | 6.0 |
- ▸High IV: 74%
Catalyst
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 7.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULT|L3:NEWS_MOD=+2|ENTRY_STICKY:WITHIN_BANDPassed (7)
- MOMENTUM:5.4>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.50
- EARNINGS_PROXIMITY:83d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (2)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.4>=5.0 recovering
Reward-to-Risk
-0.66
Upside
-9.8%
Downside
15.0%
Sizing output
STARTER
SetupRecovery — Death cross but MACD improving, RSI 70
EdgeInst Constrain — Small cap ($0.6B) below institutional reach
SuitabilitySpeculative — Drawdown -49% (>40% off 52w high)
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:5.4>=4.5. Top dim: Value at 8.6; weakest: Technical at 2.1. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Value at 8.6, Catalyst at 7.4, and Sentiment at 5.8; the weakest are Technical at 2.1, Quality at 4.2, and Peer rank at 5.0. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.66 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% at the next earnings report, ending the current 4-quarter beat streak.
- P2Attractive Valuation Strong FcfTripped
Trip ifForward P/E exceeds 12x without a decline in FCF margin.
- P3Confirmed Technical Downtrend
Trip ifPrice stays above the 200-day moving average for more than 20 consecutive trading days, ending the confirmed downtrend.
- P4Thin Risk Reward Margin
Trip ifUpside margin exceeds 15% as the stock re-rates or the price target is raised.
- P5Insider Selling Signal
Trip ifInsider buying exceeds $500,000 over a rolling 90-day window, reversing the bearish signal.