Sprinklr, Inc. (CXM) stock intrinsic value fair value estimate & owner earnings analysis

Sprinklr sells a cloud software platform (Unified-CXM) that large companies use to manage customer service, marketing, social media and research across many channels. About 88% of fiscal 2026 revenue ($756 million of $857 million) is subscriptions; the rest is professional services. Remaining contracted revenue was $986.5 million at January 31, 2026, essentially unchanged from $987.7 million a year earlier, with $618.8 million due to be recognized within twelve months. What we measure. We value the cash the business generates for shareholders after subtracting stock-based pay (which reached $84 million in fiscal 2026, up from $60 million), routine capital spending including capitalized software, and swings in customer billings and collections. On that basis owner earnings were about $0.15 per share in fiscal 2024, $0.16 in fiscal 2025 and $0.20 in fiscal 2026. Earlier years were negative or near break-even around the June 2021 IPO and are not representative. We use the fiscal 2024 to 2026 median, about $0.16 per share (roughly $43 million a year), because that is the period in which the company has been profitable in cash terms. Reported cash flow from operations jumped to $159 million in fiscal 2026, but most of that was stock pay added back and are not a level we rely on. The reported net income of $121.6 million in fiscal 2025 was inflated by an $87 million non-cash tax benefit and is ignored. The company holds $163 million in cash and $340 million in marketable securities and has no debt that we found; the interest on that cash is already inside operating cash flow, so we do not add the cash separately. Growth reconciliation. Owner earnings grew about 25% in fiscal 2026 (from $0.156 to $0.195 per share), but that year benefited from a $22 million drop in customer receivables and a lower share count. Our base case starts flat, not at 25%, because underlying growth is fading: subscription revenue grew 7% in fiscal 2025 and 5% in fiscal 2026; Americas revenue grew only 3% in fiscal 2026 (Europe, Middle East and Africa grew 15%); subscription gross margin pressure took total gross margin from 76% in fiscal 2024 to 72% and then 67% in fiscal 2026 as cost of subscription rose 27% against subscription revenue growth of 5%; and in the six months to July 31, 2026 revenue grew about 4% with the second quarter up under 1%, while operating cash flow was $88.5 million against $118.6 million a year earlier. Those recent quarters do not yet justify lowering the earnings level, but they rule out crediting growth. Base case, about $1.66 per share. Owner earnings stay at about $0.16 for ten years, supported by the roughly $1 billion of contracted revenue and recurring subscription base, then fade steadily to zero over the following fifteen years. We credit no growth: we found no signed or already-paid-for driver that lifts earnings, and expansion in Europe or add-on products, though visible in recent results, has not been enough to offset weakness elsewhere. Restructuring in fiscal 2026 cost $16.8 million in cash; we did not assume its savings. Bear case, about $0.69 per share. Gross margin keeps eroding at the pace of the past two years, subscription revenue stalls, and owner earnings decline in a straight line to zero over ten years. The evidence is the margin slide from 76% to 67%, flat contracted revenue and a second-quarter fiscal 2027 revenue increase of under 1%. There is no debt to add to this case. Bull case, about $2.08 per share. Subscription growth continues at the 5% to 7% recorded in fiscal 2025 and 2026, tapering to 1% by year ten, and margins hold, lifting owner earnings to about $0.21 per share by year ten before the same fifteen-year fade. That relies only on what the business has already delivered in the past two years. What would make this wrong. If stock-based pay stabilizes near $60 million while revenue growth re-accelerates above 8%, owner earnings would exceed our base case. If gross margin falls further, or large customers cut the quantities they buy, the bear case applies. A large part of the company's cash pile is not counted in our value, so a reader who values that cash separately would arrive at a higher figure. Unreconciled: the company's own non-GAAP earnings and free cash flow figures ($141.9 million for fiscal 2026) are built on a different basis and are not used.