SPS Commerce (SPSC, Financial), a leading company in supply chain management solutions, has reported its first-quarter revenue of $181.5 million, surpassing analysts' expectations of $179.02 million. This positive performance reflects the robustness of its extensive network, which connects over 50,000 suppliers, logistics firms, and purchasing organizations across various sectors, including retail, distribution, grocery, and manufacturing.
The company is strategically positioned to capitalize on an $11 billion total addressable market, with an aim to revolutionize trading partner collaboration through technological advancements in supply chain operations. Under the leadership of CEO Chad Collins, SPS Commerce continues to strengthen its role as a pivotal player in the industry by supporting evolving trading relationships among businesses.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for SPS Commerce Inc (SPSC, Financial) is $190.95 with a high estimate of $230.00 and a low estimate of $154.00. The average target implies an upside of 37.34% from the current price of $139.03. More detailed estimate data can be found on the SPS Commerce Inc (SPSC) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, SPS Commerce Inc's (SPSC, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SPS Commerce Inc (SPSC, Financial) in one year is $255.37, suggesting a upside of 83.68% from the current price of $139.03. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SPS Commerce Inc (SPSC) Summary page.
SPSC Key Business Developments
Release Date: February 10, 2025
- Q4 2024 Revenue: $170.9 million, an 18% increase year-over-year.
- Q4 2024 Recurring Revenue Growth: 19% year-over-year.
- Q4 2024 Adjusted EBITDA: $49.6 million, an 18% increase.
- Full Year 2024 Revenue: $637.8 million, a 19% increase.
- Full Year 2024 Recurring Revenue Growth: 20%.
- Full Year 2024 Adjusted EBITDA: $186.6 million, an 18% increase.
- Total Cash and Investments at Year-End: $241 million.
- Recurring Revenue Customers: Approximately 45,350.
- Wallet Share: Approximately $13,300.
- Q1 2025 Revenue Guidance: $178.5 million to $180 million, 19% to 20% growth.
- Q1 2025 Adjusted EBITDA Guidance: $49.5 million to $50.5 million.
- Q1 2025 Fully Diluted EPS Guidance: $0.39 to $0.41.
- Full Year 2025 Revenue Guidance: $758 million to $763 million, 19% to 20% growth.
- Full Year 2025 Adjusted EBITDA Guidance: $227.5 million to $231 million, 22% to 24% growth.
- Full Year 2025 Fully Diluted EPS Guidance: $1.93 to $1.99.
- Full Year 2025 Non-GAAP Diluted Income Per Share Guidance: $3.78 to $3.84.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SPS Commerce Inc (SPSC, Financial) reported a strong revenue growth of 19% for the full year 2024, reaching $637.8 million.
- Recurring revenue grew by 20%, with fulfillment growth at 20% and analytics growth at 8%.
- The company successfully completed acquisitions, including Vision33's SAP Business One integration technology, Traverse Systems, SupplyPike, and Carbon6, enhancing their product portfolio.
- SPS Commerce Inc (SPSC) expanded its addressable market to $11.1 billion globally, with $6.5 billion in the US, indicating significant growth potential.
- The company maintained a strong financial position with total cash and investments of $241 million at the end of 2024.
Negative Points
- Analytics growth slowed to 8% in 2024, down from 10% in previous years, indicating potential challenges in this segment.
- The company's guidance for 2025 suggests a moderation in organic revenue growth, potentially due to macroeconomic factors.
- There is a risk of customer attrition due to international exposure and tariff uncertainties.
- The integration of recent acquisitions like Carbon6 and SupplyPike may pose challenges and could be EBITDA margin dilutive in the short term.
- The company's analytics product is more susceptible to changes in the retail macro environment, which could impact future growth.
