Sprout Social shares have fallen 15.4% over the past six months to $8.58, underperforming the S&P 500's 8.2% gain. The company's billings reached $110.5 million in the first quarter, but year-on-year growth averaged just 9.6% over the last four quarters, signaling soft demand. Wall Street analysts project revenue growth of only 6.9% over the next 12 months, a sharp deceleration from the 26.8% annualized pace of the past five years. Sprout Social has also posted an average GAAP operating margin of negative 8.1% over the last year, reflecting an expensive cost structure. The stock trades at 1 times forward price-to-sales, but the firm recommends avoiding it in favor of a dominant aerospace business with a strong M&A track record.
Sprout Social IncWeak billings growth of 9.6% and projected revenue deceleration to 6.9% signal soft demand for Sprout Social's products.