SPS Commerce (SPSC) AI Stock Analysis

• Market Cap: $4.03B
• Dividend Yield: N/A
• Average Volume (3M): 441.49K
• Price to Earnings (P/E): 48.8
• Beta (1Y): 1.26
• Revenue Growth: 20.51%
• EPS Growth: 12.84%
• Country: US
• Employees: 2,783
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 1.00
• Shares Outstanding: 37,908,764
• 10 Day Avg. Volume: 437,512
• 30 Day Avg. Volume: 441,491
• 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: 1.26
• Enterprise Value/Revenue: 7.23
• Enterprise Value/Gross Profit: 10.61
• Enterprise Value/Ebitda: 35.86
• 1Y Price Target: $143.00
• Price Target Upside: 34.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 67 Neutral
• Price Target: $124.00 ▲(16.63% Upside)

SPS Commerce's overall stock score is driven by its strong financial performance and positive earnings call, which highlight consistent growth and strategic positioning. However, the high valuation and bearish technical indicators present challenges, reflecting potential risks in the current market environment.

Positive Factors

Revenue Growth

SPS Commerce's consistent revenue growth over 98 quarters underscores its strong market position and demand for its solutions, indicating a durable business model.

Partnerships

The partnership with Trader Joe's highlights SPS's competitive advantage in supply chain solutions, enhancing its credibility and market reach.

Financial Health

A strong balance sheet with minimal leverage provides SPS Commerce with financial stability and flexibility to invest in growth opportunities.

Negative Factors

Global Trade Uncertainties

Global trade uncertainties can impact customer demand and supplier behavior, posing risks to SPS Commerce's growth and revenue stability.

Supplier Spend Scrutiny

Increased scrutiny on supplier spending can slow down new business acquisition and affect revenue growth, challenging SPS's expansion efforts.

Mid-Market ERP Challenges

Delays in mid-market ERP decisions can hinder new customer acquisition, affecting SPS Commerce's ability to expand its customer base in this segment.

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-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 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 106.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 106.32 is below the 20-day moving average (MA) of 108.42, below the 50-day MA of 114.84, and below the 200-day MA of 142.50, indicating a bearish trend. The MACD of -2.21 indicates Negative momentum. The RSI at 42.67 is Neutral, neither overbought nor oversold. The STOCH value of 27.16 is Neutral, 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
ACIW	74 Outperform	$5.39B	22.12	18.02%	―	11.22%	40.85%
QLYS	74 Outperform	$4.93B	27.22	36.41%	―	9.69%	9.50%
VRNS	72 Outperform	$6.67B	-64.99	-30.14%	―	14.29%	-14.42%
BOX	71 Outperform	$4.69B	26.00	98.79%	―	6.29%	62.03%
WEX	69 Neutral	$5.50B	20.29	31.31%	―	-1.62%	36.57%
SPSC	67 Neutral	$4.03B	48.83	10.03%	―	20.51%	12.84%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

SPS Commerce Corporate Events

SPS Commerce Holds 2025 Annual Stockholders Meeting

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.