Is Sprinklr (CXM) Below Fair Value Following Flat Revenue And Lower EPS Guidance?
Sprinklr (CXM) is back in focus after its latest quarterly earnings and updated guidance, which combined flat year on year revenue, softer professional services margins, and a lower full year adjusted EPS outlook with higher subscription revenue expectations.
Sprinklr’s share price has been volatile around these results, with the stock falling 8.55% on the day to $6.95 and down 6.96% over the past week, even after a 30-day share price return of 6.6% and a 90-day share price return of 29.18% that point to earlier momentum now fading. Over a longer horizon, total shareholder return is down 10.21% over the past year and over 50% over three and five years. This suggests investors are still reassessing growth potential and risk after the softer professional services performance and reduced full year adjusted EPS outlook.
Compare Sprinklr’s reset expectations with other software stocks that pair revenue resilience with balance sheet strength, using our hand picked list of solid balance sheet and fundamentals (52 results) as a starting point.
Sprinklr still has a recognisable software platform and a clean balance sheet, yet the share price has retreated after guidance reset and margin pressure. Are investors now getting a solid business at a fair price or not?
Most Popular Narrative: 11.7% Undervalued
Sprinklr's most followed narrative places fair value at $7.88 per share, a touch above the latest $6.95 close. This frames the current reset as a valuation gap rather than a collapse in the equity story.
Sprinklr's accelerated integration and deployment of advanced AI functionality across its Marketing, Insights, and CCaaS products is enabling customers to harness actionable insights from complex, unstructured data, directly benefiting from the broader enterprise demand for AI powered analytics and automation. This supports higher platform adoption, customer expansion, and ultimately improves both revenue growth and net margins over time.
Want to know why this fair value still comes out ahead of the current price even after guidance reset and margin pressure? The narrative leans on a specific mix of customer expansion, recurring revenue quality and a future earnings profile that assumes meaningful compression from today. Curious which growth and profitability paths still back an undervalued call despite those headwinds? The full narrative sets out the exact revenue run rate and earnings level that would need to line up with that $7.88 figure.
Result: Fair Value of $7.88 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the Sprinklr narrative could unravel if customer churn among its roughly 700 key enterprise clients rises, or if higher AI infrastructure costs continue to squeeze margins.
Find out about the key risks to this Sprinklr narrative.
Another View On Sprinklr: Is The P/E Multiple Doing Too Much Work?
The earlier fair value of $7.88 for Sprinklr relies on future cash flows and growth assumptions. A simple P/E check tells a different story. Sprinklr trades on about 56.8x earnings, compared with 30.7x for the wider US Software industry, 43.1x for peers, and a fair ratio of 32.1x. That gap suggests a lot has to go right for current holders. Are you comfortable paying a richer multiple when recent returns and margins have been under pressure?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With sentiment on Sprinklr clearly mixed, this is the moment to review the numbers yourself, weigh both caution and optimism, and run through the 2 key rewards and 2 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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