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SPS Commerce
(NASDAQ:SPSC)
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Rating:78Outperform
Price Target:
$94.00
▲(16.68% Upside)
Action:Reiterated
Date:09/12/26
SPSC scores well primarily on high-quality financial performance (strong multi-year growth, robust margins, excellent free cash flow, and near-zero leverage). The earnings call supports the outlook with guided margin expansion and early AI monetization progress, though divestiture-related comparability noise and onboarding/investment timing are watch items. Technicals are supportive with a clear uptrend, while the biggest constraint on the score is valuation, with a high P/E and no dividend yield provided.
Positive Factors
Sustained Revenue Growth
SPS has expanded revenue substantially over multiple years, demonstrating durable customer adoption and market penetration. Its recurring commerce-network model can support further expansion as customers add trading partners, workflows, transaction volume, and related software services.
Negative Factors
Divestiture Reduces Revenue Base
The divestiture creates a lasting reduction in reported revenue and recurring customer count, making near-term comparisons less favorable and increasing execution demands on the remaining business. The recognized loss also reflects portfolio disruption, even though management expects the transaction to be neutral to second-half adjusted EBITDA.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Revenue Growth
SPS has expanded revenue substantially over multiple years, demonstrating durable customer adoption and market penetration. Its recurring commerce-network model can support further expansion as customers add trading partners, workflows, transaction volume, and related software services.
Read all positive factors
SPS Commerce Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue across different business segments, revealing which areas are driving growth and where the company may need to focus strategic efforts.
Breaks down revenue across different business segments, revealing which areas are driving growth and where the company may need to focus strategic efforts.
Data provided by:
The Fly
The FlySPS Commerce (SPSC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.07B
Dividend YieldN/A
Average Volume (3M)520.36K
Price to Earnings (P/E)41.0
Beta (1Y)0.98
Revenue Growth9.80%
EPS Growth-5.52%
CountryUS
Employees2,948
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)2.08
Shares Outstanding36,000,175
10 Day Avg. Volume524,233
30 Day Avg. Volume520,364
Financial Highlights & Ratios
PEG Ratio1.92
Price to Book (P/B)3.47
Price to Sales (P/S)4.49
P/FCF Ratio22.17
Enterprise Value/Market Cap0.63
Enterprise Value/Revenue2.49
Enterprise Value/Gross Profit3.57
Enterprise Value/Ebitda10.50
Forecast
1Y Price Target
$75.88Price Target Upside-5.82% Downside
Rating ConsensusHold
Number of Analyst Covering9
EPS Forecast (FY)4.9
Revenue Forecast (FY)$790.55M
SPS Commerce Business Overview & Revenue Model
Company Description
SPS Commerce, Inc. delivers comprehensive, cloud-based solutions for supply chain management across the globe. The company's central offering is its "SPS Commerce" platform, an advanced system that enhances operations for retailers, suppliers, gro...
How the Company Makes Money
SPS Commerce primarily makes money through recurring subscription revenue from its cloud-based commerce network and software services, supplemented by services revenue tied to customer onboarding and ongoing managed operations. (1) Subscription / ...
SPS Commerce Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
Overall the call emphasized solid operational and financial execution: revenue and recurring revenue growth, strong free cash flow (trailing 12-month FCF +40% YoY), margin expansion, active capital return, and compelling early AI/analytics customer outcomes (MAX and replatformed analytics). The primary negatives were a one-time loss on the divestiture of the 3P revenue recovery business and resulting customer-count/revenue comparability noise, plus ongoing investments and timing noise around ERP onboarding and AI expense timing. On balance the company showed profitable growth, strong cash generation, and clear paths to AI monetization, while managing one-time portfolio rationalization and near-term investment timing.Positive Updates
Revenue and Recurring Revenue Growth
Q2 revenue of $198.0M, up 6% year-over-year; recurring revenue also grew 6% YoY. Full-year 2026 revenue guidance of $788M–$793.4M (≈5% growth at midpoint) and core business (excluding divestiture) expected to grow high single digits.
Negative Updates
Divestiture of 3P Revenue Recovery Business and Related Loss
Sold the 3P revenue recovery business on June 30, 2026 for $9.5M in cash at closing and recognized a $23.5M loss on sale in Q2. The divestiture reduced the recurring customer base by ~7,300 and will reduce second-half 2026 revenue by approximately $10.5M.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Recurring Revenue Growth
Q2 revenue of $198.0M, up 6% year-over-year; recurring revenue also grew 6% YoY. Full-year 2026 revenue guidance of $788M–$793.4M (≈5% growth at midpoint) and core business (excluding divestiture) expected to grow high single digits.
Read all positive updates
Company Guidance
SPS guided Q3 2026 revenue of $196.3M–$198.3M, adjusted EBITDA of $67.4M–$69.4M, GAAP diluted EPS $0.72–$0.76 (based on ~36.8M diluted shares) and non‑GAAP diluted EPS $1.20–$1.23, with projected Q3 stock‑based compensation of ~$16.4M, depreciation of ~$5.4M and amortization of ~$8.5M. For full‑year 2026 they forecast revenue of $788M–$793.4M (≈5% growth at the midpoint versus 2025; core business ex‑divestiture growing high single digits), adjusted EBITDA of $265M–$269.1M (34% margin at midpoint, ~300 bps improvement vs. 2025), GAAP diluted EPS $2.24–$2.33 (≈36.9M shares), non‑GAAP diluted EPS $4.84–$4.93, stock‑based comp ~$69.8M, depreciation ~$23.4M and amortization ~$35.6M, and they expect an approximate 30% effective tax rate on GAAP pre‑tax earnings for the remaining quarters. Guidance assumes a ~$10.5M revenue reduction in H2 from the June 30 divestiture (which management says will be neutral to H2 adjusted EBITDA); the divestiture closed with $9.5M cash received and a $23.5M loss on sale recognized in Q2.SPS Commerce Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
92
Very Positive
Cash Flow
89
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 772.49M | 751.50M | 637.76M | 536.91M | 450.88M | 385.28M |
| Gross Profit | 539.36M | 519.88M | 427.05M | 354.84M | 297.81M | 253.60M |
| EBITDA | 183.20M | 176.56M | 141.71M | 120.31M | 99.37M | 78.45M |
| Net Income | 78.00M | 93.34M | 77.05M | 65.82M | 55.13M | 44.60M |
Balance Sheet | ||||||
| Total Assets | 1.13B | 1.17B | 1.03B | 823.84M | 672.91M | 615.85M |
| Cash, Cash Equivalents and Short-Term Investments | 173.17M | 151.35M | 241.02M | 275.44M | 214.31M | 257.31M |
| Total Debt | 6.31M | 7.19M | 12.47M | 14.03M | 17.29M | 20.53M |
| Total Liabilities | 186.95M | 195.97M | 176.54M | 156.37M | 135.84M | 131.59M |
| Stockholders Equity | 938.48M | 973.89M | 854.69M | 667.48M | 537.07M | 484.26M |
Cash Flow | ||||||
| Free Cash Flow | 198.70M | 152.27M | 137.35M | 112.54M | 80.17M | 93.31M |
| Operating Cash Flow | 228.14M | 178.79M | 157.40M | 132.30M | 100.05M | 112.89M |
| Investing Cash Flow | -20.68M | -169.15M | -110.45M | -92.64M | -112.79M | -46.70M |
| Financing Cash Flow | -142.28M | -100.83M | -23.03M | 15.97M | -31.63M | -8.36M |
SPS Commerce Technical Analysis
Positive
80.56
Price Trends
81.25
Positive
70.84
Positive
68.28
Positive
Market Momentum
1.41
Negative
58.79
Neutral
78.39
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 80.56 is below the 20-day moving average (MA) of 82.83, below the 50-day MA of 81.25, and above the 200-day MA of 68.28, indicating a bullish trend. The MACD of 1.41 indicates Negative momentum. The RSI at 58.79 is Neutral, neither overbought nor oversold. The STOCH value of 78.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPSC.
SPS Commerce Risk Analysis
SPS Commerce disclosed 29 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.07B | 40.99 | 8.14% | ― | 9.80% | -5.52% | |
75 Outperform | $131.05M | 17.72 | 14.94% | 1.11% | 3.01% | 12.00% | |
71 Outperform | $706.34M | 24.46 | 12.98% | ― | 9.62% | 140.62% | |
66 Neutral | $3.39B | 17.40 | 49.22% | 2.46% | 3.78% | 60.08% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $285.03M | -49.78 | -12.79% | ― | 2.77% | 68.74% | |
56 Neutral | $716.82M | -9.79 | -8.73% | 0.34% | 18.81% | 25.45% |
* Technology Sector Average
SPSC
SPS Commerce
85.25
-25.48
-23.01%
PAR
Par Technology
17.33
-17.76
-50.61%
TRAK
ReposiTrak
7.20
-7.87
-52.24%
CMRC
Commerce.com
3.44
-1.41
-29.07%
VTEX
VTEX
4.20
-0.14
-3.23%
NATL
NCR Atleos, LLC
45.94
8.03
21.18%
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.