Sprout Social (NASDAQ:SPT) Shares Gap Up After Better-Than-Expected Earnings

Sprout Social, Inc. (NASDAQ:SPTGet Free Report)’s stock price gapped up prior to trading on Friday after the company announced better than expected quarterly earnings. The stock had previously closed at $8.19, but opened at $9.61. Sprout Social shares last traded at $10.2350, with a volume of 518,895 shares trading hands.

The company reported $0.26 EPS for the quarter, beating analysts’ consensus estimates of $0.16 by $0.10. Sprout Social had a negative net margin of 8.18% and a negative return on equity of 13.90%. The firm had revenue of $123.85 million during the quarter, compared to analysts’ expectations of $122.19 million. Sprout Social has set its FY 2026 guidance at 1.110-1.150 EPS and its Q3 2026 guidance at 0.290-0.300 EPS.

Key Headlines Impacting Sprout Social

Here are the key news stories impacting Sprout Social this week:

  • Positive Sentiment: Q2 earnings beat estimates: Sprout Social reported adjusted earnings of $0.26 per share, versus the $0.16 consensus estimate and $0.18 a year earlier. Revenue reached approximately $123.8 million, ahead of expectations near $122.2 million and up 10.8% year over year. Sprout Social Surpasses Q2 Earnings and Revenue Estimates
  • Positive Sentiment: Raised full-year earnings guidance: Management now expects fiscal 2026 adjusted EPS of $1.11–$1.15, well above the prior consensus estimate of $0.68. Third-quarter EPS guidance of $0.29–$0.30 also exceeds the $0.18 consensus, supporting the view that operating leverage is improving. Sprout Social Announces Second Quarter 2026 Financial Results
  • Positive Sentiment: Enterprise customer growth remained encouraging: Subscription revenue contribution from customers generating at least $30,000 in annual recurring revenue increased 20% year over year, indicating continued traction with larger accounts. Operating cash flow was positive at $8.5 million, and the company ended the quarter with approximately $119.9 million in cash.
  • Neutral Sentiment: Revenue outlook was largely in line: Third-quarter revenue guidance of $123.3–$124.1 million and full-year guidance of $493.0–$495.6 million were broadly consistent with consensus estimates. The upside in the stock therefore appears driven more by earnings guidance than by accelerating revenue expectations. Sprout Social 2026 Q2 Earnings Presentation
  • Negative Sentiment: GAAP losses and insider selling remain risks: A third-party report indicated a GAAP net loss of approximately $3.1 million, or $0.05 per diluted share, despite the adjusted EPS beat. It also cited eight insider sales and no insider purchases during the past six months. These factors may limit investor enthusiasm if profitability does not translate into sustained GAAP earnings.

Analysts Set New Price Targets

A number of brokerages have weighed in on SPT. Barclays boosted their price target on Sprout Social from $8.00 to $9.00 and gave the stock an “overweight” rating in a research report on Monday, May 11th. Weiss Ratings reaffirmed a “sell (e+)” rating on shares of Sprout Social in a research report on Friday, July 17th. Finally, KeyCorp reiterated an “underweight” rating on shares of Sprout Social in a research note on Friday. Three research analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat, Sprout Social presently has a consensus rating of “Hold” and an average price target of $10.29.

Check Out Our Latest Stock Analysis on Sprout Social

Insider Buying and Selling

In other Sprout Social news, insider Justyn Russell Howard sold 40,000 shares of Sprout Social stock in a transaction dated Friday, July 10th. The shares were sold at an average price of $8.28, for a total value of $331,200.00. Following the completion of the sale, the insider owned 7,417 shares in the company, valued at $61,412.76. The trade was a 84.36% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Corporate insiders own 9.60% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in the business. LB Partners LLC raised its holdings in Sprout Social by 144.7% in the 1st quarter. LB Partners LLC now owns 1,510,979 shares of the company’s stock valued at $8,613,000 after acquiring an additional 893,502 shares in the last quarter. Cubist Systematic Strategies LLC grew its holdings in shares of Sprout Social by 739.6% during the 2nd quarter. Cubist Systematic Strategies LLC now owns 714,089 shares of the company’s stock worth $14,932,000 after purchasing an additional 629,033 shares in the last quarter. Canada Pension Plan Investment Board increased its position in shares of Sprout Social by 20,382.0% in the second quarter. Canada Pension Plan Investment Board now owns 471,087 shares of the company’s stock worth $9,850,000 after purchasing an additional 468,787 shares during the period. Y Intercept Hong Kong Ltd increased its position in shares of Sprout Social by 252.2% in the first quarter. Y Intercept Hong Kong Ltd now owns 626,762 shares of the company’s stock worth $3,573,000 after purchasing an additional 448,783 shares during the period. Finally, Readystate Asset Management LP acquired a new position in Sprout Social in the fourth quarter valued at about $4,830,000.

Sprout Social Stock Performance

The stock has a 50 day moving average of $7.78 and a 200 day moving average of $7.09. The company has a quick ratio of 0.95, a current ratio of 0.95 and a debt-to-equity ratio of 0.15. The firm has a market cap of $617.39 million, a price-to-earnings ratio of -15.53 and a beta of 0.97.

Sprout Social Company Profile

(Get Free Report)

Sprout Social (NASDAQ: SPT) is a Chicago-based software company specializing in social media management solutions for businesses of all sizes. The company provides a cloud-based platform designed to help organizations improve their social media presence through a suite of tools for content scheduling, community engagement, social listening and analytics. Sprout Social’s platform is built to streamline the workflows of marketing, customer care and public relations teams by providing a centralized hub for managing multiple social channels.

The company’s product offerings include publishing and scheduling capabilities that allow users to plan and automate social content across networks such as Facebook, Instagram, Twitter, LinkedIn and Pinterest.

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