Head to Head Review: Sprout Social (NASDAQ:SPT) & Twilio (NYSE:TWLO)

Sprout Social (NASDAQ:SPT) and Twilio (NYSE:TWLO) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Insider and Institutional Ownership

84.3% of Twilio shares are owned by institutional investors. 11.0% of Sprout Social shares are owned by insiders. Comparatively, 4.5% of Twilio shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Sprout Social has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Twilio has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.

Profitability

This table compares Sprout Social and Twilio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprout Social	-17.24%	-40.94%	-15.70%
Twilio	-10.65%	0.85%	0.71%

Valuation & Earnings

This table compares Sprout Social and Twilio”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprout Social	$392.40 million	4.46	-$66.43 million	($1.20)	-25.42
Twilio	$4.34 billion	3.82	-$1.02 billion	($2.57)	-42.04

Sprout Social has higher earnings, but lower revenue than Twilio. Twilio is trading at a lower price-to-earnings ratio than Sprout Social, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Sprout Social and Twilio, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprout Social	1	7	7	0	2.40
Twilio	2	10	11	0	2.39

Sprout Social currently has a consensus target price of $45.46, suggesting a potential upside of 49.05%. Twilio has a consensus target price of $93.61, suggesting a potential downside of 13.37%. Given Sprout Social’s stronger consensus rating and higher probable upside, research analysts clearly believe Sprout Social is more favorable than Twilio.

About Sprout Social

Sprout Social, Inc. designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action. It offers integrated tools, such as social engagement/response; publishing; reporting and analytics; social listening and business intelligence; reputation management; social commerce; employee advocacy; and automation and workflows. In addition, the company provides smart inbox, social customer relationship management, social monitoring and alerts, customer service tools, and automation; and centralized content planning, creation, and publishing, automated scheduling, content performance reporting, suggested content, message approval workflows, publishing permissions and governance, and content and asset libraries. Further, it offers social media; content performance, customer service and team, custom report builder, and reporting API; and market research, brand health, competitive insights, consumer trends, and product feedback; and social commerce, reputation management, employee advocacy, mobile applications, and chat bot creation and management. Additionally, the company offers professional services consisting of consulting and training services. It serves social and community management; public relations; marketing; influencer marketing; customer service and care; commerce, sales and customer acquisition; recruiting and hiring, product development, and business strategy; and small-and-medium-sized businesses, mid-market companies, enterprises, marketing agencies, government, non-profit, and educational institutions. Sprout Social, Inc. was incorporated in 2010 and is headquartered in Chicago, Illinois.

About Twilio

Twilio Inc., together with its subsidiaries, provides customer engagement platform solutions in the United States and internationally. It operates through two segments, Twilio Communications and Twilio Segment. The company provides various application programming interfaces and software solutions for communications between customers and end users, including messaging, voice, email, flex, marketing campaigns, and user identity and authentication. It also offers software products to build direct, personalized relationships with their end users, such as segment, a platform that provides tools for first-party data by unifying real-time information collected; and engage, an automation platform for the delivery of omnichannel campaigns. Twilio Inc. was incorporated in 2008 and is headquartered in San Francisco, California.