SPS Commerce (SPSC) AI Stock Analysis

• Market Cap: $5.73B
• Dividend Yield: N/A
• Average Volume (3M): 360.83K
• Price to Earnings (P/E): 70.6
• Beta (1Y): 1.16
• Revenue Growth: 19.46%
• EPS Growth: 16.20%
• Country: US
• Employees: 2,783
• Sector: Technology
• Sector Strength: 76
• Industry: Software - Infrastructure
• EPS (TTM): 1.00
• Shares Outstanding: 37,977,380
• 10 Day Avg. Volume: 222,902
• 30 Day Avg. Volume: 360,829
• PEG Ratio: 15.33
• Price to Book (P/B): 5.85
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 38.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $174.86
• Price Target Upside: 15.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

SPS Commerce demonstrates strong financial performance with consistent revenue growth and profitability. The stock's technical indicators suggest some caution due to potential downward trends. Valuation remains high with a notable P/E ratio, which may deter some investors. The recent earnings call provided positive guidance, although there are concerns regarding the analytics business and external economic factors.

Positive Factors

Market Expansion

The company provided an updated market analysis, effectively doubling the initial IPO TAM from 2010 to more than $11 billion, due to both market and platform expansion.

Revenue Growth

SPS Commerce reported a solid first quarter with total and recurring revenue growing 21% and 23%, respectively, approximately $2 million ahead of expectations.

Negative Factors

Growth Expectations

Near-term growth expectations show a modest deceleration from over 14% to approximately 10.5%.

Macro Uncertainty

Macro uncertainty negatively impacted Analytics more than expected, which reported a 2% Y/Y revenue decline.

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 include electronic data interchange (EDI) solutions, retail analytics, and other supply chain management tools. The company charges its customers, which consist of retailers, suppliers, distributors, and logistics companies, for access to its platform on a recurring basis. Additionally, SPS Commerce may earn revenue from professional services, such as implementation, training, and consulting, that help clients effectively utilize its solutions. Strategic partnerships and integrations with other technology providers and platforms also enhance the company's offerings and contribute to its revenue streams.

SPS Commerce Financial Statement Overview

Summary

SPS Commerce shows strong financial performance with robust revenue and profit growth, efficient cost management, and a solid balance sheet. The company benefits from low leverage and strong cash generation capabilities, making it a strong player in the software infrastructure industry.

Income Statement

SPS Commerce has demonstrated strong revenue growth, with a TTM revenue increase of 5% compared to the previous year. The gross profit margin stands at 67%, indicating efficient cost management. The net profit margin is robust at 12.1%, supported by steady EBIT and EBITDA margins of 14.8% and 17.9% respectively. This performance indicates solid profitability and operational efficiency, typical for a mature software company.

Balance Sheet

The balance sheet of SPS Commerce reflects financial stability with a low debt-to-equity ratio of 0.013. The return on equity is a healthy 8.8%, showcasing effective management of shareholders' funds. The equity ratio is strong at 83%, indicating a well-capitalized structure with substantial equity backing. This balance sheet structure positions the company well against potential financial challenges.

Cash Flow

SPS Commerce reports a strong free cash flow with a growth rate of approximately 2.4% over the past year. The operating cash flow to net income ratio is 2.01, which highlights strong cash conversion capabilities. The free cash flow to net income ratio of 1.73 further underscores the company's efficiency in converting profits into cash. These metrics indicate a solid cash flow position, although future capital expenditures could impact growth.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
669.74M	637.76M	536.91M	450.88M	385.28M	312.63M
	Gross Profit
448.76M	427.05M	354.84M	297.81M	253.60M	212.79M
	EBIT
99.44M	88.88M	77.25M	71.18M	55.09M	50.16M
	EBITDA
135.81M	131.11M	112.00M	99.37M	80.00M	68.82M
	Net Income Common Stockholders
81.25M	77.05M	65.82M	55.13M	44.60M	45.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
275.44M	241.02M	275.44M	214.31M	257.31M	187.48M
	Total Assets
823.84M	1.03B	823.84M	672.91M	615.85M	525.52M
	Total Debt
14.03M	12.47M	14.03M	17.29M	20.53M	22.47M
	Net Debt
-205.05M	-228.55M	-205.05M	-145.61M	-187.02M	-127.22M
	Total Liabilities
156.37M	176.54M	156.37M	135.84M	131.59M	104.80M
	Stockholders Equity
667.48M	854.69M	667.48M	537.07M	484.26M	420.72M
Cash Flow		Free Cash Flow
140.65M	137.35M	112.54M	80.17M	93.31M	72.09M
	Operating Cash Flow
163.32M	157.40M	132.30M	100.05M	112.89M	88.56M
	Investing Cash Flow
-255.29M	-110.45M	-92.64M	-112.79M	-46.70M	-120.47M
	Financing Cash Flow
-47.09M	-23.03M	15.97M	-31.63M	-8.36M	2.33M

SPS Commerce Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 150.94
• 50DMA: Positive
• 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 Positive. The current price of 150.94 is above the 20-day moving average (MA) of 142.44, above the 50-day MA of 135.04, and below the 200-day MA of 171.73, indicating a neutral trend. The MACD of 4.28 indicates Negative momentum. The RSI at 64.07 is Neutral, neither overbought nor oversold. The STOCH value of 73.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPSC.

SPS Commerce Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	78 Outperform	$4.97B	27.97	40.23%	―	9.58%	12.41%
BOX	75 Outperform	$4.67B	24.03	189.40%	―	5.05%	103.11%
ACIW	74 Outperform	$5.13B	19.26	19.69%	―	13.11%	91.21%
SPSC	73 Outperform	$5.73B	70.60	10.13%	―	19.46%	16.20%
VRNS	66 Neutral	$5.18B	―	-22.21%	―	13.34%	13.71%
Sector *	60 Neutral	$11.59B	10.39	-7.23%	2.94%	7.46%	-10.76%
WEX	60 Neutral	$4.77B	17.95	24.37%	―	0.90%	26.13%

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.

Spark’s Take on SPSC Stock

According to Spark, TipRanks’ AI Analyst, SPSC is a Outperform.

SPS Commerce demonstrates strong financial performance with consistent revenue growth and profitability. The stock’s technical indicators suggest some caution due to potential downward trends. Valuation remains high with a notable P/E ratio, which may deter some investors. The recent earnings call provided positive guidance, although there are concerns regarding the analytics business and external economic factors.

To see Spark’s full report on SPSC stock, click here.

SPS Commerce Appoints Razat Gaurav to Board

On February 25, 2025, SPS Commerce’s Board of Directors expanded from seven to eight members, appointing Razat Gaurav as an independent director effective March 6, 2025. This strategic move comes as James Ramsey, a long-serving board member since 2014, announced his retirement and decision not to seek re-election at the 2025 annual meeting. Gaurav’s appointment and Ramsey’s retirement are part of the company’s ongoing efforts to strengthen its governance and strategic direction.