SPS Commerce, Inc. (SPSC)
NASDAQInformation TechnologySoftware - ApplicationSnapshot 2026-09-09
$78.26-0.94%
Close 2026-09-09 · 1-day change
NASDAQInformation TechnologySoftware - ApplicationSnapshot 2026-09-09
Warn: Primary pillar under pressure — Maintain or improve operating income near $24.6M: Operating income $8.5M vs $24.5M target.
SPS Commerce grows revenue about 6% yearly by expanding its core business. Cash from operations rose from $40M to $56M in one year. The company trades cheaply with a PE of 15.6 versus peers at 38. It has strong buyback plans and stable leadership.
Operating income fell from $26M to $24.6M, showing weak profit control. Growth could slow below analyst estimates near 8%. A sale or activist push might disrupt the business.
The price is about 37% below our fair value near $101. Analysts expect about 8% revenue growth. Our value is well above the Street median of $60.
Breaks if: Cash from operations falls below $55M next year
Grow cash flow from operating activities to support business and capital allocation priorities.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on technology and operational efficiency. The current thesis state is intact, supported by consistent revenue growth and margin expansion.
The market appears to have priced in a neutral valuation, with SPSC being seen as cheap compared to its peers. There is a slight expectations gap, suggesting that some positive developments may not be fully reflected in the current valuation.
Fundamentals are likely to continue showing steady revenue growth, as management has prioritized this area and achieved consistent results. The recent improvement in adjusted EBITDA margin indicates operational progress, although the focus on expanding AI capabilities has mixed results.
The thesis hinges on the performance of sector bellwethers like SAP, CRM, and NOW, as their earnings results could influence SPSC's momentum. Additionally, any changes in Federal Reserve interest rates could impact the broader tech sector.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The latest earnings beat supports the read on SPSC. However, guidance indicates potential revenue growth issues, which threatens the outlook.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 3 of last 3 quarters. Cash from operating activities increased from $45.9 million in 2025-Q4 to $55.6 million in 2026-Q2, showing growth in operating cash flow. This trend aligns with management's stated focus on increasing cash from operations.
“Cash from operating activities was $55.6 million in Q2 2026.”
“Cash from operating activities was $55.6 million in Q1 2026.”
“Cash from operating activities was $45.9 million in Q4 2025.”
Breaks if: Operating income falls below $24.5M next year
Breaks if: YoY revenue growth falls below ~6% next year
Focus on growing revenue and recurring revenue through core business expansion and cross-selling.
Stated as a priority in 3 of last 3 quarters. Revenue grew from $181.5 million in 2025-Q1 to $192.1 million in 2026-Q1 and further to $197.8 million in 2026-Q2, representing consistent 6% year-over-year growth. Management's focus on revenue growth is delivering steadily as reflected in the quarterly financials.
“Revenue was $197.8 million in the second quarter of 2026, compared to $187.4 million in the second quarter of 2025, reflecting 6% growth.”
“Revenue was $192.1 million in the first quarter of 2026, compared to $181.5 million in the first quarter of 2025, reflecting 6% growth.”
“SPS has achieved 100 consecutive quarters of revenue growth.”
Breaks if: PE rises above 20 without earnings growth
Over the next 1 to 3 years, SPSC's performance will depend on its ability to sustain growth and manage risks in a fluctuating tech environment. Not investment advice.