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Sps Commerce (SPSC)
NASDAQ:SPSC
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SPS Commerce
(NASDAQ:SPSC)
Rating:67Neutral
Price Target:
$124.00
▲(11.67% Upside)
Positive Factors
Financial Performance
SPS Commerce reported a solid second quarter with total and recurring revenue growing 22% and 24%, respectively, approximately $2 million ahead of expectations.
Growth Opportunities
SupplyPike is expanding into four new department stores, marking a significant acceleration in retailer growth for SPS' new revenue recovery solution.
Strategic Positioning
Supply chain digitization and enhanced visibility remain an area of prioritization among both retailers and suppliers, and SPS’s orchestration platform remains mission-critical in facilitating communication throughout this ecosystem.
Negative Factors
Growth Expectations
Management has tempered growth expectations for the second half of 2025 and anticipates more conservative growth into 2026.
Macroeconomic Concerns
Revenue was on the lower end of its historical reported range due to macro and tariff-driven trepidation impacting supply chain software purchasing decisions.
Market Outlook
Management's cautious outlook for 2026 fell short of projections and Street consensus, reflecting concerns over future performance.
SPS Commerce (SPSC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.19B
Dividend YieldN/A
Average Volume (3M)505.40K
Price to Earnings (P/E)50.7
Beta (1Y)1.26
Revenue Growth20.51%
EPS Growth12.84%
CountryUS
Employees2,783
SectorTechnology
Sector Strength84
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.00
Shares Outstanding37,908,764
10 Day Avg. Volume453,918
30 Day Avg. Volume505,405
Financial Highlights & Ratios
PEG Ratio5.94
Price to Book (P/B)8.03
Price to Sales (P/S)10.76
P/FCF Ratio49.97
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue7.23
Enterprise Value/Gross Profit10.61
Enterprise Value/Ebitda35.86
Forecast
1Y Price Target
$153.30Price Target Upside38.06% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
SPS Commerce Business Overview & Revenue Model
Company DescriptionSPS Commerce (SPSC) is a leading provider of cloud-based supply chain management solutions, specializing in the retail and wholesale sectors. The company offers a comprehensive suite of services including electronic data interchange (EDI), analytics, and fulfillment solutions that help businesses streamline their operations and improve collaboration with trading partners. SPS Commerce serves a diverse range of industries, enabling companies to enhance their supply chain efficiency and better meet customer demands.
How the Company Makes MoneySPS Commerce generates revenue primarily through subscription-based services that include its EDI solutions, analytics, and fulfillment offerings. The company charges clients monthly or annual fees based on the volume of transactions processed or the number of users accessing its platform. Key revenue streams also include professional services for implementation and ongoing support. Significant partnerships with retailers, suppliers, and third-party logistics providers enhance its market reach and contribute to recurring revenue. Moreover, as businesses increasingly adopt cloud solutions for supply chain management, SPS Commerce benefits from the growing demand for its services, further solidifying its earnings potential.
SPS Commerce Key Performance Indicators (KPIs)
SPS Commerce Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong performance for SPS Commerce with consistent revenue and EBITDA growth. However, challenges related to macroeconomic uncertainties and supplier spending scrutiny pose potential risks to future growth. Despite these challenges, the company remains optimistic about its growth potential and strategic positioning in the market.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
SPS Commerce delivered a strong second quarter with revenue growing 22% to $187.4 million. Recurring revenue grew 24% year-over-year.
Consistent Revenue Growth
This quarter marked the 98th consecutive quarter of revenue growth for SPS Commerce.
Trader Joe's Partnership
Trader Joe's partnered with SPS to achieve 100% vendor compliance, showcasing the effectiveness of SPS's solutions in improving supply chain efficiency.
Improved Financial Metrics
Adjusted EBITDA increased 27% to $56.1 million compared to $44.2 million in the prior year. The company ended the quarter with $108 million in cash and investments.
Positive Guidance for Future Growth
For the full year 2025, SPS expects revenue growth of 19% to 20%, adjusted EBITDA growth of 24% to 25%, and plans for continued acquisitive growth to enhance market leadership.
Negative Updates
Impact of Global Trade Uncertainties
Uncertainties in the macro environment, including tariffs and potential impacts on consumer demand, are affecting customer behavior, particularly in the supplier segment.
Supplier Spend Scrutiny
Some suppliers are delaying purchasing decisions and scrutinizing spend more heavily due to global trade uncertainties, impacting SPS's growth outlook.
Mid-Market ERP Challenges
There is a noted delay in mid-market ERP purchase decisions, which typically drive new customers to SPS's network.
Company Guidance
During the SPS Commerce 2025 Earnings Conference Call, guidance for the third quarter of 2025 included expectations for revenue to be in the range of $191.7 million to $193.2 million, representing a year-over-year growth of approximately 17% to 18%. The company projected adjusted EBITDA between $57.9 million and $59.9 million, with fully diluted earnings per share expected to be between $0.50 and $0.54. The non-GAAP diluted income per share was anticipated to range from $0.96 to $1. For the full year 2025, SPS Commerce expected revenue between $759 million and $763 million, translating to a 19% to 20% increase over 2024. Adjusted EBITDA for the year was forecasted to be $230.7 million to $233.7 million, marking a growth of 24% to 25% over the previous year. The guidance for fully diluted earnings per share was set between $2.17 and $2.22, while non-GAAP diluted income per share was projected to be between $3.99 and $4.04. The company also outlined a medium-term expectation of at least high single-digit revenue growth beyond 2025, excluding acquisitions, and anticipated annual adjusted EBITDA margin expansion by 2 percentage points, driven by improvements in gross margin and operating efficiencies.SPS Commerce Financial Statement Overview
Summary
SPS Commerce exhibits strong financial health with consistent revenue growth and solid profitability margins. The balance sheet is well-managed with low leverage, and the company’s cash flow generation is robust. These factors collectively position SPS Commerce as a financially stable and efficiently managed entity poised for sustainable growth.Income Statement
SPS Commerce exhibits strong revenue growth with a 10.31% increase in revenue from 2024 to the TTM (Trailing-Twelve-Months) period. The company maintains healthy profitability metrics with a gross profit margin of 68.17% and a net profit margin of 11.79% for the TTM. Additionally, EBIT and EBITDA margins are solid at 14.60% and 18.10%, respectively. These figures reflect effective cost management and operational efficiency.85
Very Positive
Balance Sheet
The balance sheet of SPS Commerce is robust, highlighted by a low debt-to-equity ratio of 0.01, indicating minimal leverage. The equity ratio of 84.70% underscores a strong capital foundation. Return on equity is commendable at 8.73%, showcasing efficient use of equity to generate profits. The company’s financial position is stable, though there is room for improvement in asset utilization.80
Positive
Cash Flow
SPS Commerce demonstrates healthy cash flow dynamics, with a notable free cash flow growth of 3.33% from 2024 to the TTM period. The operating cash flow to net income ratio of 2.00 and the free cash flow to net income ratio of 1.71 indicate strong cash generation capabilities relative to net income. This positions the company well for reinvestment and shareholder returns.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 703.54M | 637.76M | 536.91M | 450.88M | 385.28M | 312.63M |
| Gross Profit | 479.59M | 427.05M | 354.84M | 297.81M | 253.60M | 212.79M |
| EBITDA | 141.89M | 131.11M | 112.00M | 99.37M | 80.00M | 68.82M |
| Net Income | 82.95M | 77.05M | 65.82M | 55.13M | 44.60M | 45.59M |
Balance Sheet | ||||||
| Total Assets | 1.12B | 1.03B | 823.84M | 672.91M | 615.85M | 525.52M |
| Cash, Cash Equivalents and Short-Term Investments | 107.60M | 241.02M | 275.44M | 214.31M | 257.31M | 187.48M |
| Total Debt | 10.80M | 12.47M | 14.03M | 17.29M | 20.53M | 22.47M |
| Total Liabilities | 171.32M | 176.54M | 156.37M | 135.84M | 131.59M | 104.80M |
| Stockholders Equity | 949.78M | 854.69M | 667.48M | 537.07M | 484.26M | 420.72M |
Cash Flow | ||||||
| Free Cash Flow | 141.93M | 137.35M | 112.54M | 80.17M | 93.31M | 72.09M |
| Operating Cash Flow | 166.20M | 157.40M | 132.30M | 100.05M | 112.89M | 88.56M |
| Investing Cash Flow | -253.97M | -110.45M | -92.64M | -112.79M | -46.70M | -120.47M |
| Financing Cash Flow | -44.80M | -23.03M | 15.97M | -31.63M | -8.36M | 2.33M |
SPS Commerce Technical Analysis
Negative
111.04
Price Trends
122.83
Negative
131.66
Negative
147.83
Negative
Market Momentum
-3.13
Negative
44.30
Neutral
58.57
Neutral
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 111.04 is below the 20-day moving average (MA) of 111.61, below the 50-day MA of 122.83, and below the 200-day MA of 147.83, indicating a bearish trend. The MACD of -3.13 indicates Negative momentum. The RSI at 44.30 is Neutral, neither overbought nor oversold. The STOCH value of 58.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPSC.
SPS Commerce Risk Analysis
SPS Commerce disclosed 28 risk factors in its most recent earnings report. SPS Commerce reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SPS Commerce Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $4.02B | 312.34 | 2.10% | ― | 35.12% | ― | |
68 Neutral | $3.74B | 12.37 | 25.94% | ― | 8.71% | 25.75% | |
67 Neutral | $4.19B | 50.74 | 10.03% | ― | 20.51% | 12.84% | |
63 Neutral | $3.77B | ― | -12.60% | ― | 11.41% | 33.76% | |
62 Neutral | $3.51B | ― | -2.60% | ― | 24.41% | 40.20% | |
61 Neutral | $35.83B | 9.00 | -10.42% | 1.87% | 8.46% | -7.85% | |
54 Neutral | $3.98B | ― | -81.98% | ― | 20.48% | -44.22% |
* Technology Sector Average
Performance Comparison
SPSC
SPS Commerce
111.04
-74.84
-40.26%
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91.34
-5.29
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TENB
Tenable Holdings
30.79
-8.19
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AVPT
AvePoint
16.57
4.90
41.99%
CLBT
Cellebrite DI
17.27
0.76
4.60%
RELY
Remitly Global
20.25
6.63
48.68%
SPS Commerce Corporate Events
Executive/Board ChangesShareholder Meetings
SPS Commerce Holds 2025 Annual Stockholders Meeting
Neutral
May 13, 2025
On May 13, 2025, SPS Commerce held its 2025 Annual Meeting of Stockholders where several key decisions were made. The stockholders elected directors to serve until the 2026 meeting, ratified KPMG LLP as the independent auditor for 2025, approved the compensation of named executive officers, and decided to hold annual Say-on-Pay votes. These decisions reflect the company’s commitment to maintaining consistent governance practices and ensuring transparency in executive compensation.
The most recent analyst rating on (SPSC) stock is a Buy with a $230.00 price target. To see the full list of analyst forecasts on SPS Commerce stock, see the SPSC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.