Shares of Sprout Social, Inc. (SPT) plummeted 6.39% on Thursday morning after KeyBanc analyst Jackson Ader reiterated a 'Sell' rating on the stock.
In the research note, Ader expressed concerns about the company's growth prospects and competitive positioning in the social media management market. While acknowledging Sprout Social's strong product offerings, the analyst cited increasing competition from larger players as a potential threat to the company's market share.
Ader also questioned the sustainability of Sprout Social's high operating margins, noting that the company may need to increase investments in research and development to maintain its competitive edge. This could put pressure on profitability in the near term.
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