Social media management software provider Sprout Social’s (SPT) impressive revenue growth and customer-base expansion have excited investors. However, considering the competitive digital marketing landscape, given that the company is nowhere near being profitable, is its stock a good bet now? Read on to learn more.Sprout Social, Inc. (NASDAQ:SPT) is an online social media management tools operator that offers cloud software, contact management, and communication tools to businesses worldwide. The Chicago-based concern’s ability to secure a record number of net-new customers and expand integrations with social commerce leaders have helped SPT’s stock gain 29.6% over the past three months.
But the stock closed yesterday’s trading session at $82.60, 13.7% below its 52-week high of $95.75.
Although increasing social media usage and the company’s aggressive investments have driven its total ARR up 38% year-over-year to $172.0 million in its last reported quarter, SPT’s losses have expanded significantly. So, until the company shows a path to profitability in an increasingly competitive landscape, we think it could be a risky bet.