CXM: Slowing Revenue Outlook Will Likely Keep Shares Range Bound

Analysts reduced their price target on Sprinklr by $1 to $8. This reflects a more cautious outlook driven by tempered revenue growth and margin expectations despite a slightly higher assumed future valuation multiple.

Analyst Commentary

Bearish analysts have highlighted the latest price target cut to $8 as a signal that the risk reward profile has weakened, even as the overall rating remains neutral rather than overtly negative.

They point to a narrower margin of safety in the valuation, arguing that the shares now leave less room for execution missteps or further deceleration in top line growth.

Bearish Takeaways

• Lowered price targets reflect concern that current valuation already discounts much of the foreseeable upside, limiting potential multiple expansion.
• Cautious sentiment centers on moderating revenue growth trends, with fears that a slower demand environment could make it harder for Sprinklr to hit medium term targets.
• Bearish analysts see execution risk around managing costs while investing for growth, raising questions about the pace and durability of margin improvement.
• The combination of trimmed price targets and neutral ratings underscores a view that, absent a clear reacceleration in growth, the shares could remain range bound.

What's in the News

• Issued new guidance for the fourth quarter and full year ending January 31, 2026, projecting Q4 revenue of $216.5 million to $217.5 million and full year revenue of $853 million to $854 million (Corporate guidance)
• Launched next generation AI capabilities, including Sprinklr Copilot and Sprinklr AI Agents, along with enhanced Customer Feedback Management features to unify data and elevate human AI collaboration across the CX stack (Product announcement)
• Announced that Anthony Coletta, a longtime SAP finance executive, will join Sprinklr as Chief Financial Officer on October 7, 2025, overseeing all global financial operations and investor relations (Executive changes)
• Expanded a global strategic partnership with SAMY to combine Sprinklr's Unified CXM platform with SAMY's social first marketing expertise, enabling brands like Diageo to turn real time social insights into product and marketing decisions (Client announcement)
• Highlighted success powering L’Oréal’s global employee advocacy program, where Sprinklr Advocacy helped generate more than 33 million organic impressions and a four times return on investment in 18 months by enabling staff to share curated brand content (Client announcement)

Valuation Changes

• Fair Value: reduced from $8.0 to $7.0, reflecting a modest downward revision in intrinsic value estimates.
• Discount Rate: risen slightly from 8.47% to 8.50%, implying a marginally higher required return and risk premium.
• Revenue Growth: fallen significantly from about 6.3% to about 3.2%, signaling a more conservative outlook on top line expansion.
• Net Profit Margin: decreased from roughly 5.3% to roughly 4.1%, indicating expectations for lower profitability.
• Future P/E: increased from about 42.5x to about 52.4x, suggesting a higher assumed valuation multiple despite softer growth and margin forecasts.