On Thursday, Sprinklr Inc (NYSE:CXM) saw its price target increased from $9.50 to $10.50 by DA Davidson, while the firm retained its Neutral rating on the company’s shares. The adjustment follows Sprinklr’s fiscal fourth quarter 2025 results, which surpassed expectations, particularly in terms of reduced expenses. The company, which according to InvestingPro data has posted a strong 13.6% return over the past week and maintains a healthy 73.3% gross profit margin, is currently in the midst of implementing its multiyear turnaround strategy.
DA Davidson’s analysts noted Sprinklr’s efforts to achieve its Rule of 40 target—a financial benchmark that balances growth and profitability. In February, Sprinklr executed a 15% reduction in force (RIF) as a strategic move to streamline its expense base. This downsizing is part of a broader reallocation plan, where the savings will be invested to stimulate top-line growth and drive product innovation. InvestingPro data reveals the company holds more cash than debt on its balance sheet, with a solid current ratio of 1.74, suggesting strong financial flexibility to execute its strategic initiatives.
The analysts emphasized that the price target increase to $10.50 is based on 2.5 times the company’s projected sales for fiscal year 2027. Despite the positive results and strategic adjustments, DA Davidson has chosen to maintain a Neutral stance on Sprinklr stock. According to InvestingPro’s comprehensive analysis, which includes over 30 key metrics and financial indicators available to subscribers, the company demonstrates good overall financial health with particular strength in growth and cash flow metrics.
Sprinklr’s recent RIF and subsequent reallocation of funds highlight the company’s focus on achieving a balance between growth and profitability. The management’s commitment to the Rule of 40 is seen as a guiding principle for the company’s future financial planning and operational adjustments.
In summary, Sprinklr’s better-than-expected fiscal fourth-quarter performance and strategic realignment have led to a revised price target from DA Davidson. However, the research firm maintains a cautious outlook with a Neutral rating, reflecting a wait-and-see approach to the company’s ongoing turnaround efforts.
In other recent news, Sprinklr Inc. reported robust fourth-quarter earnings for fiscal year 2025, with earnings per share (EPS) of $0.10, surpassing the forecasted $0.07. The company’s revenue for the quarter reached $202.5 million, slightly exceeding expectations of $200.52 million. Sprinklr’s subscription revenue increased by 3% year-over-year, contributing to an overall revenue growth of 4% for the quarter. The company has set optimistic guidance for the first quarter of fiscal year 2026, projecting revenues between $201.5 million and $202.5 million, alongside a non-GAAP EPS of $0.10.
Rosenblatt Securities raised its price target for Sprinklr to $12.00, maintaining a Buy rating, following the company’s strong performance and strategic improvements under new leadership. Scotiabank (TSX:BNS) also adjusted its price target to $9.00, citing Sprinklr’s non-GAAP operating margin guidance of 16% for FY26, which exceeds the consensus expectation. Meanwhile, JMP Securities maintained a Market Outperform rating with a $17.00 price target, emphasizing the company’s ability to exceed earnings expectations.
Sprinklr’s recent strategic changes, including a 15% workforce reduction and a revamped go-to-market strategy, are aimed at enhancing operational efficiency and customer engagement. These developments, combined with the company’s strong financial outlook, have contributed to increased investor confidence. As Sprinklr continues to implement its strategic initiatives, analysts will be closely monitoring its performance for signs of growth reacceleration.
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