William Blair analyst Dylan Becker has maintained their neutral stance on SPSC stock, giving a Hold rating yesterday.
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Dylan Becker’s rating is based on a combination of factors affecting SPS Commerce’s performance. The company reported mixed results for the third quarter, with revenue falling short of expectations by $3 million, although EBITDA exceeded projections by $1 million. Several challenges are impacting the company’s outlook, including a weaker recovery in third-party Carbon6 revenue, ongoing budget constraints among suppliers regarding technology investments, and delays in enablement campaigns due to the holiday season.
These issues have led management to lower its guidance for fiscal 2025 and provide a conservative outlook for fiscal 2026, which is at the lower end of its long-term growth expectations. Despite the company’s critical role in facilitating fulfillment between retailers and suppliers, these factors are contributing to a negative sentiment around the stock, which has seen a significant decline. While the stock is trading at a discount compared to peers, concerns about slowing growth, macroeconomic uncertainties, and the sensitivity of its SMB supplier base to broader economic conditions justify maintaining a Hold rating.
Becker covers the Technology sector, focusing on stocks such as Autodesk, Clearwater Analytics Holdings, and Guidewire. According to TipRanks, Becker has an average return of 9.1% and a 55.79% success rate on recommended stocks.
In another report released yesterday, Cantor Fitzgerald also downgraded the stock to a Hold with a $80.00 price target.