Wall Street Zen Downgrades Sprout Social to 'Hold' Rating

Analysts cut price targets and issue downgrades after mixed Q4 earnings report

Published on Feb. 28, 2026

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Sprout Social (NASDAQ:SPT), a Chicago-based social media management software company, was downgraded from a "buy" rating to a "hold" rating by Wall Street Zen on Saturday. The downgrade comes after Sprout Social reported Q4 results that beat estimates, but also showed ongoing GAAP losses and declining customer retention metrics.

Why it matters

The downgrade and reduced price targets from analysts signal concerns about Sprout Social's underlying financial performance and future growth prospects, despite the company's recent revenue and non-GAAP profit beat. This could put pressure on the stock in the near-term as investors weigh the company's ability to improve profitability and sustain customer growth.

The details

In its Q4 report, Sprout Social posted $0.20 non-GAAP EPS and $120.9 million in revenue, both exceeding analyst expectations. However, the company also reported a GAAP net loss, negative net margins, and a decline in dollar-based net retention to 100% from 104% in the prior year. Analysts at KeyCorp, Canaccord, and Needham subsequently cut their price targets on Sprout Social, with KeyCorp downgrading the stock to 'underweight'.

  • Sprout Social reported Q4 2025 results on February 26, 2026.
  • Wall Street Zen downgraded Sprout Social to a 'hold' rating on February 28, 2026.

The players

Sprout Social

A Chicago-based software company that provides social media management solutions for businesses.

Wall Street Zen

An equity research firm that downgraded Sprout Social's stock rating.

KeyCorp

An investment bank that downgraded Sprout Social to 'underweight' and cut its price target to $6.

Canaccord

An investment bank that trimmed its price target on Sprout Social to $9 and maintained a 'hold' rating.

Needham

An investment bank that sharply reduced its price target on Sprout Social from $32 to $14, while maintaining a 'buy' rating.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, grocery employee (Instagram)

The takeaway

Sprout Social's mixed Q4 results and the subsequent analyst downgrades highlight the ongoing challenges the company faces in improving its profitability and sustaining customer growth. While the company has made progress on some strategic initiatives, the underlying financial metrics continue to raise concerns about its long-term viability.