SPS Commerce (SPSC) AI Stock Analysis

• Market Cap: $3.42B
• Dividend Yield: N/A
• Average Volume (3M): 534.16K
• Price to Earnings (P/E): 41.3
• Beta (1Y): 1.16
• Revenue Growth: 19.28%
• EPS Growth: 6.16%
• Country: US
• Employees: 2,783
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 1.13
• Shares Outstanding: 37,709,095
• 10 Day Avg. Volume: 803,642
• 30 Day Avg. Volume: 534,162
• PEG Ratio: 5.94
• Price to Book (P/B): 8.03
• Price to Sales (P/S): 10.76
• P/FCF Ratio: 49.97
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 5.25
• Enterprise Value/Gross Profit: 7.67
• Enterprise Value/Ebitda: 23.22
• 1Y Price Target: $102.00
• Price Target Upside: 10.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 4.12
• Revenue Forecast (FY): $752.46M

• Rating: 77 Outperform
• Price Target: $96.00 ▲(4.17% Upside)

SPS Commerce's overall stock score is driven by its strong financial performance and strategic initiatives like the share buyback program. However, technical indicators and valuation suggest caution, with the stock appearing expensive and showing bearish trends. The earnings call provided a balanced view with strong growth metrics but highlighted challenges and cautious future guidance.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for SPS Commerce's services, enhancing its market position and supporting long-term financial health.

Cash Flow Management

Efficient cash flow management ensures SPS Commerce can fund growth initiatives and withstand economic fluctuations, strengthening its financial resilience.

Balance Sheet Health

A strong balance sheet with low leverage reduces financial risk, providing SPS Commerce with flexibility to invest in strategic opportunities.

Negative Factors

Revenue Recovery Business Shortfall

Shortfalls in the revenue recovery business highlight potential vulnerabilities in adapting to market changes, impacting future revenue stability.

Reduced Q4 Revenue Expectations

Lowered revenue expectations for Q4 suggest challenges in sustaining growth momentum, potentially affecting investor confidence and strategic planning.

Market Challenges

Macroeconomic uncertainties and spending scrutiny may hinder customer growth and retention, posing risks to SPS Commerce's long-term revenue prospects.

SPS Commerce Business Overview & Revenue Model

Company Description

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, suppliers, grocers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships. The company also provides Fulfillment solution that provides fulfillment automation and replaces or augments an organization's existing staff and trading partner electronic communication infrastructure by enabling easy compliance with retailers' rulebooks, automatic, and digital exchange of information among numerous trading partners through various protocols, and greater visibility into the journey of an order; and Analytics solution, which consists of data analytics applications that enables customers to enhance their visibility across supply chains through greater analytics capabilities. In addition, it offers various complimentary products, such as assortment product, which enables accurate order management and rapid fulfillment; and community product that accelerates vendor onboarding and ensures trading partner adoption of new supply chain requirements. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

How the Company Makes Money

SPS Commerce generates revenue primarily through subscription fees for its cloud-based services, which are offered on a recurring basis. The company's key revenue streams include its EDI services, which facilitate electronic communication between retailers and suppliers, and its data analytics solutions that provide insights into trading partner performance and market trends. Additionally, SPS Commerce earns revenue from implementation services, training, and support, which help clients effectively utilize the platform. Strategic partnerships with major retailers and suppliers further enhance its market presence and contribute to its financial performance.

SPS Commerce Financial Statement Overview

Summary

SPS Commerce exhibits strong financial health with consistent revenue growth, solid profitability margins, and a low-risk balance sheet. The company effectively manages its cash flows, supporting its growth trajectory. While operational efficiency could be improved, the overall financial position remains robust and stable.

Income Statement

SPS Commerce demonstrates strong revenue growth with a TTM revenue increase of 3.73% and a consistent gross profit margin of around 68%. The net profit margin is healthy at 11.66%, indicating efficient cost management. However, the EBIT margin has slightly decreased to 10.57%, suggesting some pressure on operational efficiency.

Balance Sheet

The company maintains a robust balance sheet with a very low debt-to-equity ratio of 0.01, highlighting minimal leverage and financial risk. The return on equity is stable at 9.23%, reflecting effective use of equity capital. The equity ratio is strong, indicating a solid capital structure.

Cash Flow

SPS Commerce shows positive cash flow trends with a free cash flow growth rate of 4.56% in the TTM. The operating cash flow to net income ratio is slightly above 1, indicating good cash conversion. The free cash flow to net income ratio is strong at 0.86, suggesting efficient cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	729.76M	637.76M	536.91M	450.88M	385.28M	312.63M
Gross Profit	499.50M	427.05M	354.84M	297.81M	253.60M	212.79M
EBITDA	165.09M	131.11M	112.00M	99.37M	78.45M	68.82M
Net Income	85.06M	77.05M	65.82M	55.13M	44.60M	45.59M
Balance Sheet
Total Assets	1.16B	1.03B	823.84M	672.91M	615.85M	526.46M
Cash, Cash Equivalents and Short-Term Investments	133.72M	241.02M	275.44M	214.31M	257.31M	187.48M
Total Debt	9.64M	12.47M	14.03M	17.29M	20.53M	24.37M
Total Liabilities	199.74M	176.54M	156.37M	135.84M	131.59M	105.74M
Stockholders Equity	958.94M	854.69M	667.48M	537.07M	484.26M	420.72M
Cash Flow
Free Cash Flow	148.39M	137.35M	112.54M	80.17M	93.31M	72.09M
Operating Cash Flow	173.48M	157.40M	132.30M	100.05M	112.89M	88.56M
Investing Cash Flow	-161.73M	-110.45M	-92.64M	-112.79M	-46.70M	-120.47M
Financing Cash Flow	-75.48M	-23.03M	15.97M	-31.63M	-8.36M	2.33M

SPS Commerce Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 92.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPSC, the sentiment is Negative. The current price of 92.16 is above the 20-day moving average (MA) of 84.94, above the 50-day MA of 91.04, and below the 200-day MA of 118.58, indicating a neutral trend. The MACD of 0.45 indicates Negative momentum. The RSI at 62.16 is Neutral, neither overbought nor oversold. The STOCH value of 83.87 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPSC.

SPS Commerce Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPSC	77 Outperform	$3.42B	41.27	9.51%	―	19.28%	6.16%
EEFT	66 Neutral	$3.24B	11.44	23.10%	―	7.25%	-1.12%
CLBT	66 Neutral	$4.60B	62.90	20.46%	―	18.37%	―
RELY	66 Neutral	$3.06B	156.03	2.94%	―	31.27%	―
AVPT	65 Neutral	$3.01B	-1,497.80	0.58%	―	24.71%	99.52%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TENB	61 Neutral	$2.96B	-88.49	-8.95%	―	11.05%	45.23%

SPS Commerce Corporate Events

SPS Commerce Announces New $100M Share Buyback

On October 29, 2025, SPS Commerce‘s board of directors authorized a new share repurchase program, allowing the company to buy back up to $100 million of its common stock. This program will be effective from December 1, 2025, to December 1, 2027, and will be funded through existing cash and future cash flows. The current repurchase program will end on July 26, 2026, or when the authorized amount is fully utilized. This strategic move is expected to have implications for the company’s financial operations and market positioning.