Reassessing Sprinklr’s Valuation After Recent AI Platform Expansion and Share Price Weakness

• Wondering if Sprinklr is quietly turning into a value opportunity while everyone chases the flashier software names? Let us break down what the current share price really implies about its future.
• Sprinklr shares now trade at about $7.71, with the stock down 0.4% over the last week but up 5.9% across the past month, hinting at shifting sentiment even as the year to date return sits at -9.7% and the 1 year return at -18.2%.
• Recent headlines have focused on Sprinklr expanding its AI powered customer experience platform and deepening partnerships with large enterprise clients. This helps explain why the market has started to reassess its long term potential. At the same time, investors are still weighing competitive pressures in the crowded CX software space, which is keeping the share price from fully reflecting that narrative.
• On our framework, Sprinklr scores a 4/6 valuation check, suggesting it screens as undervalued on several important metrics but not all. Next we will unpack those valuation approaches in detail, and later in the article we will look at an even richer way to think about what the market is really pricing in.

Find out why Sprinklr's -18.2% return over the last year is lagging behind its peers.

Approach 1: Sprinklr Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in dollar terms.

For Sprinklr, the 2 Stage Free Cash Flow to Equity model starts with last twelve months free cash flow of about $123.2 Million and then applies analyst forecasts and longer term extrapolations. Analysts see free cash flow rising to around $146.4 Million by 2028, with Simply Wall St extending this path further so that by 2035 the model assumes free cash flow of roughly $200.2 Million. These 10 year projections blend analyst estimates for the next few years with moderating growth assumptions thereafter.

When all those projected cash flows are discounted back to the present, the model arrives at an intrinsic value of about $11.32 per share. Compared with the current price near $7.71, this implies Sprinklr is trading at roughly a 31.9% discount to its DCF based fair value. This suggests the market is pricing in a much weaker cash flow future than this model assumes.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Sprinklr is undervalued by 31.9%. Track this in your watchlist or portfolio, or discover 913 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Sprinklr.

Approach 2: Sprinklr Price vs Earnings

For a profitable software company like Sprinklr, the price to earnings ratio is a useful lens because it links what investors pay today directly to the profits the business is already generating. In general, faster growing and lower risk companies tend to justify a higher PE multiple, while slower growth or higher uncertainty usually deserves a lower one.

Sprinklr currently trades on a PE of about 16.89x, which is roughly half the broader Software industry average of 32.36x and well below the peer group average of 37.05x. That discount might look attractive at first glance, but raw comparisons can be misleading if the companies differ in growth, margins or risk.

This is where Simply Wall St's Fair Ratio comes in. It is a proprietary estimate of what Sprinklr’s PE should be, after adjusting for its earnings growth outlook, profitability, industry, market cap and specific risks. For Sprinklr, the Fair Ratio is 13.99x, which is slightly below the current 16.89x. That suggests the stock is pricing in somewhat stronger prospects than this framework supports, pointing to a mildly rich valuation on earnings.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1455 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Sprinklr Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simple, structured stories that link your view of Sprinklr’s business to concrete forecasts for revenue, earnings and margins, and ultimately to a fair value you can compare with today’s share price.

On Simply Wall St’s Community page, millions of investors use Narratives as an easy, accessible tool to spell out why they think a company will win or struggle, connect that story to a numbers based forecast, and then see whether their Fair Value suggests Sprinklr is a buy, a hold, or a sell at the current market price.

Because Narratives are dynamically updated when new information arrives, such as earnings, AI product launches or leadership changes, they help you stay grounded in a consistent framework while still adapting your fair value as the facts change.

For example, one Sprinklr Narrative might lean bullish and see fair value closer to $17 by focusing on factors such as accelerating AI adoption and international expansion. A more cautious Narrative could anchor around $8 by stressing risks such as customer concentration, margin pressure and tougher competition. The platform lets you compare both against today’s price to decide which story you find more convincing.

Do you think there's more to the story for Sprinklr? Head over to our Community to see what others are saying!

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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