Sprout Social Shares Plunge After Q1 Sales Miss; Price Targets Cut to $40-$45

Sprout Social, Inc. (NASDAQ: SPT) has experienced significant financial setbacks as evidenced by its recent quarterly earnings report. The company's shares fell by 30.5% following the announcement of first-quarter sales of $25.47 million, which fell short of the expected $57.11 million. This underperformance led analysts to drastically reduce their price targets from the $60s and $70s range down to the $40s to $45. Additionally, Sprout Social posted a net loss of $13.6 million, or 24 cents per share, compared to a loss of $10.3 million, or 19 cents per share, in the same period last year. Despite a 29% increase in revenue to $96.8 million, it still missed Wall Street forecasts by a narrow margin. The company had initially guided for a 30% revenue growth this year, which would imply an addition of approximately $90 million. However, it only achieved a $3.2 million increase in Q1 and is projecting a mere $2 million growth for Q2, leading to a significant cut in its full-year revenue forecast to $405-406 million from the estimated $426 million. The stock is down another 20% after the earnings release, with quarterly adjusted EPS at 10 cents, significantly below the estimate of 65 cents.