Sprout Social (NASDAQ:SPT) shareholder returns have been notable, earning 99% in 3 years

Investors can aim to achieve the average market return by investing in an index fund. However, if they choose to purchase well-performing businesses at favorable prices, their portfolio returns have the potential to surpass the average market return. An exceptional example is Sprout Social, Inc. (NASDAQ:SPT), which has experienced a remarkable increase of 99% over three years, significantly outperforming the market return of 34% (excluding dividends). Conversely, the recent returns have not been as impressive, as shareholders have only seen a modest increase of 9.3%.

The previous week has shown to be profitable for investors in Sprout Social, thus let's examine whether the company's performance over the course of three years was influenced by its underlying principles.

Check out our most recent examination for Sprout Social.

Considering that Sprout Social did not earn any money in the past year, we will analyze its revenue growth as an indicator of its business progress. Typically, when a company is not profitable, we anticipate observing strong revenue growth. It is important to note that rapid and consistent growth in revenue often translates to speedy growth in profits.

In the past three years, Sprout Social has experienced a yearly revenue growth rate of 31%, surpassing the performance of most companies that are incurring losses. The consistent increase in share price by 26% each year during this period is certainly encouraging, especially considering the growth in revenue. Given these positive indicators, it may be worthwhile to closely examine Sprout Social at this time. If the company continues on its path towards profitability, it could present a highly intriguing opportunity.

The picture depicted underneath provides an overview of the progression of earnings and revenue throughout the years (clicking on the image grants a more comprehensive view).

Sprout Social is a popular investment, receiving considerable attention from industry experts, indicating potential future expansion. If you are considering purchasing or offloading Sprout Social shares, it would be beneficial to explore this complimentary report revealing analysts' collective forecasts for forthcoming earnings.

Sprout Social achieved a return rate of 9.3% in the past year. Although this is a profitable result, it is actually lower than the average market return of approximately 12%. However, the annual return rate of 26% over the course of three years provides some consolation. We believe that focusing on long-term returns is more indicative of the true performance of the business. Personally, I find it fascinating to analyze the share price over an extended period as a measure of the company's success. However, in order to truly gain insight, it is important to consider other relevant information as well. For example, we have identified 1 warning sign associated with Sprout Social, and it is crucial to take this into account during the investment process.

Naturally, there is a possibility that you may discover a remarkable investment by exploring other options. Therefore, I encourage you to have a glance at this complimentary compilation of companies that we anticipate will experience an increase in profits.

Please take into account that the market returns mentioned in this article represent the average returns of stocks currently being traded on American exchanges, based on their market weightage.

What possible dangers and advantages exist for Sprout Social?

Sprout Social, Inc. creates, builds, and maintains an online platform for managing social media across various regions including the Americas, Europe, the Middle East, Africa, and the Asia Pacific.

The estimated annual revenue growth rate is projected to be 22.02%.

Presently, the company is not making any profit and there are no expectations of it becoming profitable within the next three years.

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This blog post from Simply Wall St is quite broad in its topic. We offer observations and predictions based on past information and expert forecasts, using a fair approach. It's important to note that our articles shouldn't be considered as financial guidance and don't provide any recommendations to purchase or sell stocks. Additionally, they may not consider your personal goals or financial state. Our main goal is to provide thorough analysis grounded in fundamental data, with a focus on long-term perspectives. However, please be aware that our analysis might not incorporate the most recent company updates that may affect stock prices, nor any subjective information. It's worth mentioning that Simply Wall St has no affiliation with any of the mentioned stocks.