Sprinklr (CXM) has been drawing attention after recent share price volatility, with the stock last closing at US$5.10. For investors, that move invites a closer look at its current business and valuation profile.
See our latest analysis for Sprinklr.
That recent move comes after a weak run. The 30 day share price return is 13.27%, while the year to date share price return shows a 30.33% decline, alongside a 1 year total shareholder return of a 33.59% decline and a 3 year total shareholder return of a 57.36% decline. This suggests sentiment around Sprinklr’s growth prospects and risk profile has been fading.
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With Sprinklr now valued at about US$1.25b and trading at a sizeable discount to some analyst price targets and intrinsic estimates, the key question is whether the recent weakness is overdone or whether markets are correctly pricing its future growth.
Most Popular Narrative: 40% Undervalued
With Sprinklr’s most followed fair value estimate at $8.50 versus a last close of $5.10, the narrative points to a sizeable valuation gap built on detailed long term assumptions.
Fair Value: reduced from $11.00 to $8.50, a cut of roughly 23% that brings the updated estimate closer to recent price target ranges.
Revenue Growth: long term revenue growth assumption lowered from 7.99% to 4.88%, a significant reset in expected top line expansion.
Want to understand why a lower growth outlook still supports a higher fair value than today’s price? The key lies in how margins, earnings and future multiples are stitched together in this narrative, and how a higher discount rate is balanced against those inputs.
Result: Fair Value of $8.50 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, customer concentration around roughly 700 large clients, along with rising cloud and AI infrastructure costs, could challenge revenue stability and pressure margins if not carefully managed.
Find out about the key risks to this Sprinklr narrative.
Another View: Multiples Paint A Tougher Picture
The narrative fair value points to upside, but the current P/E of 55.4x is far higher than the US software industry at 30.5x, the peer average at 28.8x, and even an estimated fair ratio of 31.5x. That gap suggests valuation risk if sentiment or growth assumptions slip from here.
See what the numbers say about this price in more detail with a focused valuation breakdown. Start with the gap between today’s P/E and the fair ratio before you decide how compelling the setup really is See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Reading all this, do you feel the story is tilted too far one way? Act while sentiment is still split and weigh the trade off between risks and rewards by checking the 2 key rewards and 3 important warning signs
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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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