Social media management software company Sprout (NASDAQ:SPT) will be reporting results tomorrow after the bell. Here’s what to expect.

Sprout Social beat analysts’ revenue expectations by 0.6% last quarter, reporting revenues of $102.6 million, up 20% year on year. It was a mixed quarter for the company, with a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations. It added 153 enterprise customers paying more than $10,000 annually to reach a total of 9,119.

Is Sprout Social a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Sprout Social’s revenue to grow 14% year on year to $106.7 million, slowing from the 34.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.15 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Sprout Social has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Sprout Social’s peers in the sales and marketing software segment, some have already reported their Q4 results, giving us a hint as to what we can expect. AppLovin delivered year-on-year revenue growth of 44%, beating analysts’ expectations by 8.6%, and Freshworks reported revenues up 21.5%, topping estimates by 2.7%. AppLovin traded up 24.1% following the results while Freshworks’s stock price was unchanged.

Read our full analysis of AppLovin’s results here and Freshworks’s results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market has been optimistic as of late due to a soft landing. This is an economic situation where rate hikes successfully quelled inflation but did not send the economy into a recession. Furthermore, recent rate cuts and Donald Trump's triumph in the 2024 Presidential election have been tailwinds for the market, and while some of the sales and marketing software stocks have shown solid performance, the group has generally underperformed, with share prices down 2.8% on average over the last month. Sprout Social is down 13.3% during the same time and is heading into earnings with an average analyst price target of $37.31 (compared to the current share price of $29).

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.