- If you are wondering whether Sprinklr's current share price reflects its true worth, you are not alone. This comes after a tough stretch for the stock.
- Over the last year, the share price return sits at a 26.0% decline. This includes a 28.8% decline year to date, contributing to a 57.0% decline over three years.
- Recent coverage has focused on how sentiment around customer experience software names is shifting, with investors paying closer attention to profitability, cash generation and spending discipline. At the same time, commentary on competition in enterprise software has raised questions about which platforms can sustain their positions. This helps frame how the market is currently treating Sprinklr.
- Simply Wall St assigns Sprinklr a valuation score of 2 out of 6. The next sections will break down what that means across different valuation approaches, before finishing with a more complete way to think about what the stock might be worth.
Sprinklr scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Sprinklr Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model estimates what a company could be worth by projecting its future cash flows and then discounting those back to today using a required rate of return. It is essentially asking what future cash generated by the business is worth in current dollars.
For Sprinklr, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections in $. The latest twelve month free cash flow (FCF) stands at about $139.1 million. Analysts provide explicit FCF estimates for the next few years, and Simply Wall St then extrapolates those further out. Under this framework, projected FCF in 2035 is $253.4 million, with intermediate years stepping up from $117.7 million in 2026 and $162.4 million in 2028.
When these projected cash flows are discounted back and aggregated, the model arrives at an estimated intrinsic value of $13.86 per share for Sprinklr. Compared with the current share price, this implies a 62.4% discount, which indicates that the shares appear undervalued on this DCF view.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Sprinklr is undervalued by 62.4%. Track this in your watchlist or portfolio, or discover 58 more high quality undervalued stocks.
Approach 2: Sprinklr Price vs Earnings
For a profitable business, the P/E ratio is a useful way to think about value because it links what you pay today to the earnings the company is already generating. A higher P/E often reflects stronger growth expectations or lower perceived risk, while a lower P/E can suggest more modest expectations or higher risk.
Sprinklr currently trades on a P/E of 56.61x. That is above the broader Software industry average P/E of about 30.57x and also above a peer group average of 27.25x. On simple comparisons, the stock is priced at a higher earnings multiple than many Software names.
Simply Wall St also calculates a proprietary “Fair Ratio” for Sprinklr, which is 31.48x. This is the P/E level that might be expected given factors such as the company’s earnings growth profile, industry, profit margins, market cap and specific risks. This Fair Ratio can be more useful than just lining the stock up against peers or the industry, because it attempts to adjust for the company’s own characteristics rather than assuming all Software stocks deserve similar multiples. Since Sprinklr’s current P/E of 56.61x is above the Fair Ratio of 31.48x, the shares screen as expensive on this metric.
Result: OVERVALUED
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 19 top founder-led companies.
Upgrade Your Decision Making: Choose your Sprinklr Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as simple stories that you and other investors build around Sprinklr, linking what you think about its future revenue, earnings and margins to a financial forecast and a Fair Value that you can compare with the live share price.
On Simply Wall St, Narratives sit inside the Community page and are designed so you can quickly see how different views translate into numbers. For example, one bearish Sprinklr Narrative currently anchors around a Fair Value of about US$6.0, while a more bullish one works off US$12.0 and a cautious view uses US$8.5. This gives you a clear range to compare with the latest price and decide whether Sprinklr looks expensive, cheap or roughly in line with your own expectations.
Because these Narratives update when new earnings, guidance or news are added to the platform, you are not locked into a static model. You can watch how the story and the Fair Value range move over time and decide if and when any gap between price and value is wide enough for you to act.
Do you think there's more to the story for Sprinklr? Head over to our Community to see what others are saying!
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com