What Happened?
Shares of social media management platform Sprout Social (NASDAQ: SPT) jumped 2.8% in the afternoon session after Needham reiterated its Buy rating on the stock, highlighting the company's new integration with design platform Canva as a positive catalyst.
The integration allows brands to send finished visual designs directly from Canva to Sprout's social media management platform, accelerating workflows and reducing errors. Needham, which maintained its $32 price target, expressed increased optimism about Sprout's growth stabilization. The firm noted that accelerated content creation on platforms like Canva is driving increased brand engagement, which benefits Sprout. The new feature has already received positive feedback from early adopters like FedEx, which reported significant time savings and improved efficiency in its social media operations.
After the initial pop the shares cooled down to $14.42, up 2.8% from previous close.
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What Is The Market Telling Us
Sprout Social’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 5.2% on the news that the company announced a significant integration with the popular online design platform, Canva.
The new feature streamlines the process for social media teams by allowing users to send finished visual designs directly from Canva into Sprout's platform as draft posts, complete with captions and scheduling.
By eliminating the need to download and re-upload content, the integration accelerates workflows and reduces errors between creative and social teams. Sprout Social is now the most comprehensive social media management platform offering this capability. The value of this streamlined process was highlighted by early adopter FedEx, which reported significant time savings and improved efficiency in its social media operations as a result of the integration.
Sprout Social is down 53% since the beginning of the year, and at $14.42 per share, it is trading 60.2% below its 52-week high of $36.24 from December 2024. Investors who bought $1,000 worth of Sprout Social’s shares 5 years ago would now be looking at an investment worth $429.13.
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