SPS Commerce (SPSC) AI Stock Analysis

• Market Cap: $2.20B
• Dividend Yield: N/A
• Average Volume (3M): 788.75K
• Price to Earnings (P/E): 23.8
• Beta (1Y): 1.17
• Revenue Growth: 19.28%
• EPS Growth: 6.16%
• Country: US
• Employees: 2,783
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 1.14
• Shares Outstanding: 37,709,095
• 10 Day Avg. Volume: 1,289,754
• 30 Day Avg. Volume: 788,751
• PEG Ratio: 1.92
• Price to Book (P/B): 3.47
• Price to Sales (P/S): 4.49
• P/FCF Ratio: 22.17
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 2.55
• Enterprise Value/Gross Profit: 3.75
• Enterprise Value/Ebitda: 10.76
• 1Y Price Target: $83.11
• Price Target Upside: 43.42% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 4.49
• Revenue Forecast (FY): $802.32M

• Rating: 70 Outperform
• Price Target: $71.00 ▲(22.52% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by strong financial performance (durable margins, strong cash generation, and a low-debt balance sheet) and a generally constructive earnings outlook with expected EBITDA growth and margin expansion. These positives are tempered by very weak technicals (sharp downtrend and deeply negative momentum) and a relatively high P/E valuation alongside a clearly slower near-term revenue growth profile in guidance.

Positive Factors

Conservative balance sheet

Extremely low leverage and steadily expanding equity/assets give SPS durable financial flexibility. This reduces refinancing and solvency risk, supports continued investment in product development and M&A, and underpins buybacks and other shareholder returns during economic cycles.

Strong cash generation & buybacks

Robust operating and free cash flow, material cash balances, and aggressive repurchases demonstrate repeatable cash conversion and disciplined capital allocation. This creates optionality for strategic M&A, product investment or further returns while maintaining operational resilience over multiple quarters.

Recurring revenue & ARPU gains

A large subscription base plus rising ARPU indicate durable, high-quality revenue with built-in retention. Network effects, cross-sell and analytics/AI product enhancements should lift lifetime value and help sustain margins independent of aggressive new-customer acquisition.

Negative Factors

Revenue deceleration risk

Growth slowed meaningfully in 2025 versus prior years and FY2026 guidance implies much lower top-line expansion. Prolonged deceleration would limit operating leverage, slow margin expansion, constrain reinvestment capacity, and raise pressure on management to find alternative growth levers.

Customer churn & weaker small-seller base

Declines among 3P sellers and flat 1P adds signal customer retention and acquisition challenges. Persistent attrition or slower new-logo growth would cap recurring revenue expansion and ARPU acceleration, undermining long-term revenue predictability and the efficacy of cross-sell efforts.

Monetization & mix uncertainty

Key product initiatives remain in beta with unclear pricing and mix implications. If MACS or revenue-recovery products monetize slower or at lower take-rates, revenue growth and margin profiles could deviate from targets, increasing execution risk over several quarters as management refines strategy.

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

High-quality fundamentals: strong and consistent profitability (gross margin mid-to-high 60s with improving operating/net margins in 2025), robust and improving operating/free cash flow, and a very conservatively financed balance sheet with extremely low leverage. Primary watch item is the sharp slowdown in 2025 revenue growth versus prior years.

Income Statement

Revenue has grown steadily over the last several years, with strong momentum through 2024 and a much slower growth rate in 2025, signaling some deceleration risk. Profitability remains solid and fairly consistent: gross margin stays in the mid-to-high 60% range, while operating and net margins are healthy and improved in 2025 versus 2024. Overall, the business shows durable profitability with a watch item on the 2025 growth slowdown.

Balance Sheet

The balance sheet is very conservatively financed, with extremely low debt relative to equity and a declining leverage profile over time. Equity and total assets have expanded consistently, supporting balance-sheet strength. Returns on equity are solid and stable (roughly mid-to-high single digits/low double digits), though not accelerating meaningfully, which suggests value creation is steady rather than rapidly improving.

Cash Flow

Cash generation is strong and improving: operating cash flow and free cash flow trend upward, and free cash flow growth re-accelerated in 2024 and 2025 after a dip in 2022. Cash conversion is generally healthy, with operating cash flow running around net income or better in most years. A minor weakness is that free cash flow is consistently below net income (roughly mid-80% range recently), indicating ongoing reinvestment or working-capital needs, though still at attractive levels.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	751.50M	637.76M	536.91M	450.88M	385.28M
Gross Profit	482.71M	427.05M	354.84M	297.81M	253.60M
EBITDA	176.56M	131.11M	112.00M	99.37M	78.45M
Net Income	93.34M	77.05M	65.82M	55.13M	44.60M
Balance Sheet
Total Assets	1.17B	1.03B	823.84M	672.91M	615.85M
Cash, Cash Equivalents and Short-Term Investments	151.35M	241.02M	275.44M	214.31M	257.31M
Total Debt	10.03M	12.47M	14.03M	17.29M	20.53M
Total Liabilities	195.97M	176.54M	156.37M	135.84M	131.59M
Stockholders Equity	973.89M	854.69M	667.48M	537.07M	484.26M
Cash Flow
Free Cash Flow	152.27M	137.35M	112.54M	80.17M	93.31M
Operating Cash Flow	178.79M	157.40M	132.30M	100.05M	112.89M
Investing Cash Flow	-169.15M	-110.45M	-92.64M	-112.79M	-46.70M
Financing Cash Flow	-100.83M	-23.03M	15.97M	-31.63M	-8.36M

SPS Commerce Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 57.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 57.95 is below the 20-day moving average (MA) of 76.72, below the 50-day MA of 84.93, and below the 200-day MA of 108.75, indicating a bearish trend. The MACD of -8.28 indicates Positive momentum. The RSI at 12.12 is Positive, neither overbought nor oversold. The STOCH value of 4.38 is Positive, 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
CLBT	73 Outperform	$3.36B	43.97	19.10%	―	18.37%	―
SPSC	70 Outperform	$2.20B	23.79	10.21%	―	19.28%	6.16%
EEFT	66 Neutral	$2.99B	10.22	24.39%	―	7.25%	-1.12%
AVPT	65 Neutral	$2.29B	-1,168.13	0.58%	―	24.71%	99.52%
RELY	65 Neutral	$2.85B	54.64	8.86%	―	31.27%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TENB	60 Neutral	$2.62B	-72.68	-9.95%	―	11.05%	45.23%

SPS Commerce Corporate Events

SPS Commerce Reports Strong 2025 Results, Updates Leadership

On February 12, 2026, SPS Commerce reported strong fourth-quarter and full-year 2025 results, posting Q4 revenue of $192.7 million, up 13% year over year, and full-year revenue of $751.5 million, up 18%, with recurring revenue growing faster than overall sales and adjusted EBITDA rising 22% in Q4 and 24% for 2025. The company marked its 100th consecutive quarter of topline growth, expanded its share repurchase authorization to $300 million after buying back $115 million of stock in 2025, and issued 2026 guidance that calls for moderating 6%–7% revenue growth but double‑digit adjusted EBITDA expansion.

SPS Commerce also announced a leadership transition, with longtime CFO Kim Nelson retiring after nearly two decades and Joseph Del Preto, a veteran finance leader from Sprout Social, Groupon, and Echo Global Logistics, taking over as executive vice president and CFO effective March 16, 2026. The combination of solid profitability, continued investment in AI-enabled “agentic” capabilities, a larger buyback program, and a seasoned incoming finance chief underscores management’s confidence in the durability of the business model and is likely to be closely watched by investors and retail supply chain partners.

The most recent analyst rating on (SPSC) stock is a Hold with a $96.00 price target. To see the full list of analyst forecasts on SPS Commerce stock, see the SPSC Stock Forecast page.

SPS Commerce Expands Board and Boosts Share Repurchases

On February 12, 2026, SPS Commerce expanded its board to ten members and appointed Michael McConnell and Fumbi Chima as independent directors, with McConnell joining the Finance & Strategy Committee and Chima joining the Audit Committee. Long‑serving director Sven Wehrwein will retire at the 2026 annual meeting under the company’s age‑limit policy, after which the board will comprise nine directors, eight of them independent and four appointed within the past year.

On the same date, SPS Commerce entered into a cooperation agreement with shareholder Anson Funds Management LP that includes voting commitments in favor of the company’s nominees and customary standstill, confidentiality and non‑disparagement provisions, limiting Anson’s ability to influence governance during the term. The company also boosted its share repurchase authorization to $300 million, signaling confidence in its performance and aligning its refreshed board, investor cooperation and capital return strategy around enhancing long‑term shareholder value.

The most recent analyst rating on (SPSC) stock is a Hold with a $96.00 price target. To see the full list of analyst forecasts on SPS Commerce stock, see the SPSC Stock Forecast page.