Is Sprinklr's (CXM) Surging Earnings Growth Reshaping Its Investment Narrative?

• Over the past year, Sprinklr achieved impressive earnings growth, with earnings per share rising from US$0.19 to US$0.49 and revenue increasing 6.1% to US$821 million while maintaining stable EBIT margins.
• Insiders now hold a significant US$377 million stake, making up 20% of the company, which aligns leadership interests with those of shareholders.
• We'll explore how Sprinklr's very large year-on-year earnings per share growth influences its investment narrative moving forward.

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Sprinklr Investment Narrative Recap

To be a Sprinklr shareholder today, you have to believe that the company’s robust earnings growth and stable margins will translate into lasting competitive strength, especially as new AI-powered platform features attract and retain enterprise clients. The impressive year-on-year earnings per share jump supports near-term optimism, but it does not materially change the biggest short-term catalyst, successful AI adoption, or the main risk, which remains the potential for customer churn among its concentrated enterprise client base.

Among recent developments, the launch of new AI capabilities across Sprinklr’s core platform is especially relevant, as it positions the company to capture the enterprise need for actionable insights and automation. This initiative stands out at a time when many global brands are expanding their digital engagement, offering a clear link to growth catalysts but not fully resolving underlying revenue concentration risks.

However, investors should also be aware that while growth is strong, any increase in customer churn among top accounts remains a risk that could quickly shift sentiment…

Read the full narrative on Sprinklr (it's free!)

Sprinklr's outlook anticipates $1.0 billion in revenue and $36.8 million in earnings by 2028. This assumes an 8.0% annual revenue growth rate, but a decrease in earnings of $83.4 million from the current $120.2 million.

Uncover how Sprinklr's forecasts yield a $10.44 fair value, a 33% upside to its current price.

Exploring Other Perspectives

Five Simply Wall St Community members have set fair value estimates between US$7.79 and US$14.03 per share, showing a wide range of expectations. While viewpoints differ, concerns around concentrated revenue sources add a layer of uncertainty to future performance.

Explore 5 other fair value estimates on Sprinklr - why the stock might be worth just $7.79!

Build Your Own Sprinklr Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Sprinklr research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Sprinklr research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sprinklr's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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