Analyst George Kurosawa from Citi reiterated a Buy rating on SPS Commerce and decreased the price target to $166.00 from $173.00.
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George Kurosawa has given his Buy rating due to a combination of factors that highlight SPS Commerce’s strategic growth initiatives and potential for profitability. The company is leveraging its position as a leading retail supply chain network to drive sustainable growth across a significant total addressable market. By utilizing network data, SPS Commerce aims to enhance its sales targeting, which is expected to support revenue recovery and cross-selling efforts in the coming years.
Additionally, the company’s focus on relationship management engagements, bolstered by capabilities from recent acquisitions, is anticipated to foster strategic conversations and enable further upselling. Despite some concerns regarding slower growth in large customer additions, the network-led growth strategy is seen as a potential catalyst for high single-digit growth. Furthermore, the expectation of a 2-point annual EBITDA margin expansion, supported by gross margin improvements and AI-driven market strategies, adds to the confidence in SPS Commerce’s growth prospects.
In another report released today, Needham also maintained a Buy rating on the stock with a $160.00 price target.