On Thursday, KeyBanc Capital Markets revised its stock price target for Sprinklr Inc (NYSE:CXM), a customer experience management platform, decreasing it to $16 from the previous $19, while still maintaining an Overweight rating on the company's shares.
The adjustment follows a recent evaluation of the software sector's performance, with KeyBanc noting several warning signs that pointed to potential challenges for Sprinklr. The firm acknowledged that while they had reservations last week, they continued to support Sprinklr due to anticipated improvements in execution following recent changes in management and the company's appealing valuation.
Sprinklr's recent appointment of Trac Pham as co-CEO was identified as a positive step. Pham, who previously served as interim COO and a board member, is expected to contribute positively to the company's leadership.
Still, the company faced a setback in the fourth quarter of fiscal year 2023, similar to the issues encountered by other firms such as HubSpot (NYSE:HUBS) and Salesforce (NYSE:CRM). A weakening demand environment led to increased customer churn and fewer new bookings than anticipated.
The company's outlook for the year was revised downwards by $25 million, reflecting the need for more time to implement go-to-market changes that could eventually drive positive momentum. Despite these challenges, KeyBanc reaffirmed its positive stance on Sprinklr, citing the platform's credibility and enterprise-level service offerings.
The firm believes that Sprinklr is positioned to fare better than its peers in a tough market environment, provided it has the right management team in place. Additionally, KeyBanc suggested that at its current valuation, Sprinklr could be an attractive proposition.
In other recent news, Sprinklr, a unified customer experience management leader, has made significant strides in its strategic alliance with social media platform Reddit, becoming the inaugural partner for Reddit's Data API and Advertising API.
This partnership enables Sprinklr's enterprise customers to tap into near real-time public conversations on Reddit, providing brands with deeper insights into customer feedback, sentiment, and trends. Moreover, Sprinklr is now able to offer its customers the full suite of Reddit’s advertising options, integrating Reddit into the advertising strategies of enterprise-level brands.
Recent developments have also seen Sprinklr undergo several major adjustments following its first fiscal quarter results for 2025. Analyst firms such as Rosenblatt Securities, Wells Fargo, and DA Davidson have reduced their price targets for Sprinklr, citing concerns over the company's growth and execution challenges. Still, these firms maintain a positive outlook for Sprinklr, anticipating a return to consistent revenue growth as the company refines its go-to-market strategy.
Sprinklr's first fiscal quarter saw a 13% increase in total revenue, reaching $196.0 million, and a 12% rise in subscription revenue to $177.4 million. Despite these gains, the company's revised revenue guidance for FY25 fell below expectations by approximately 3%.
Amid these developments, Sprinklr has made notable executive moves, including the appointment of Trac Pham as co-CEO and Amitabh Misra as its new Chief Technology Officer.
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