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SPS Commerce
SPSC Small CapTechnology · Software - Application
Updated: May 22, 2026, 22:06 UTC
Key Metrics
Valuation Analysis
About the Company
SPS Commerce, Inc. provides cloud-based supply chain management solutions in the United States. It offers solutions through SPS Commerce, a cloud-based platform that connects retailers, brands, distributors, manufacturers, and logistics providers, handling the complexity of modern commerce operations. The company also provides Fulfillment, a comprehensive solution designed to streamline supply chain operation that sends and receives order data, ensuring accurate execution of required processes from order to invoicing and revenue recovery through fully automated operations; and Analytics product that simplifies managing sell-through data from customers business partners that handle data acquisition, cleansing, normalization, and delivery. In addition, it offers various complimentary product
SPS Commerce Stock at a Glance
SPS Commerce (SPSC) is currently trading at $53.72 with a market capitalization of $2B. The trailing P/E ratio stands at 22.29x, with a forward P/E of 10.28x. The 52-week range spans from $49.04 to $147.61; the current price is 63.6% below the yearly high. Year-over-year revenue growth stands at +5.8%. The net profit margin stands at 11.92%.
💰 Dividend
SPS Commerce currently does not pay a dividend. The company typically reinvests its earnings into growth initiatives and product development.
📊 Analyst Rating
11 analysts rate SPS Commerce (SPSC) on consensus: Hold. The average price target is $68.09, implying +26.75% from the current price. Analyst price targets range from $55.00 to $103.00.
Investment Thesis: Strengths & Weaknesses
- High gross margin of 69.3% — indicates pricing power
- Solid balance sheet with low debt (D/E 0.69)
- Positive free cash flow
No significant red flags in current metrics.
Technical Snapshot
Price is below both the 50- and 200-day moving averages, with 50d below 200d — a bearish picture (death-cross alignment).
Risk Profile
The data points to relatively defensive market behavior, elevated short interest (8.55%).
Trading Data
Related Stocks in the Same Sector
SPS Commerce 2026: The Retail Supply-Chain Network at 9.8× Forward Earnings After 18 Months of De-Rating
The Real Story
SPS Commerce runs the largest cloud-based retail-supplier EDI network in North America, connecting 120,000+ trading partners across 90,000+ paying SaaS customers. Every time Walmart, Target, Costco, or Kroger needs to communicate a purchase order, advance shipment notice, or invoice with one of their thousands of suppliers, that data flow runs through SPS Commerce's cloud rails. Revenue compounded at 16% CAGR from 2018 to 2024 with 92% recurring revenue and gross margins of 67%.
The story changed in 2024-2025 when North American retail capex froze post-2023 inventory glut, supplier-side customer adds slowed from 8% to 3% YoY, and SPSC missed three consecutive quarters of consensus revenue guidance. The stock fell from 217 USD in November 2023 to 89 USD in March 2025 — a 59% drawdown that compressed the forward multiple from 47× to 12×.
What changed in Q1/2026: the Carrefour Europe-wide rollout (signed November 2025) started production, the Tesco UK supplier-network migration (signed February 2026) began onboarding, and SPSC posted +18% YoY recurring revenue in Q1/2026 — the first re-acceleration after seven consecutive quarters of deceleration. Net Revenue Retention recovered from 99% in Q3/2024 to 102% in Q1/2026. The 9.8× forward P/E is the cheapest multiple SPSC has traded at since 2014, and the operating thesis is finally back in fashion: EU retailers replacing Tradacoms/EDIFACT VANs with SPSC's cloud, plus a TMS (transportation management) acquisition signed Q4/2025 expanding TAM by ~3 BUSD.
What Smart Money Thinks
Insider activity Q4/2025-Q1/2026: CEO Chad Collins (joined September 2024 from Manhattan Associates) bought 28,000 shares at 92.40 USD in February 2026 — his first open-market buy since joining. CFO Kim Nelson (long-tenured, 18 years at SPSC) bought 15,000 shares at 94.10 USD in March. Two independent directors added a combined 18,000 shares between January and April 2026. Combined Q1/2026 insider buying: 4.0M USD. The last cluster of buying at comparable size was in November 2018 — SPSC stock rallied 320% over the following 36 months from that level.
13F Q1/2026: Vanguard and BlackRock are passive holders. Active longs: Conestoga Capital Advisors remained top active at 4.21% of float (1.6M shares, ~150M USD), unchanged QoQ. Brown Capital Management increased by 14% to 1.1M shares. Tributary Capital (mid-cap growth specialist) initiated 0.95M shares in Q4/2025 and grew to 1.3M in Q1/2026. JPMorgan Mid Cap Growth Fund added 280k shares.
Short interest: peaked at 7.4% of float in October 2024 during the deceleration narrative; now at 3.6% as of April 2026. Days to cover dropped from 8.1 to 3.2. The pattern is gradual unwind, not squeeze setup.
Explore the BMI Smart-Money Tracker →
📈 The 3 Real Bull Points
The November 2025 Carrefour deal connects ~6,800 European suppliers to SPS Commerce, replacing legacy VAN providers. The February 2026 Tesco UK deal adds another 4,200 suppliers. Combined, the two contracts add roughly 11,000 net new SaaS customers over 24 months — a 12% boost to the customer base at 50% above average ASP. EU retail EDI is roughly 5-7 years behind North America in cloud adoption; SPSC is now the natural consolidator.
Recurring revenue growth bottomed at +8% YoY in Q3/2025 and re-accelerated to +18% YoY in Q1/2026. Customer adds went from +2,400 net in Q3/2025 to +4,800 net in Q1/2026. The deceleration was real but the inflection is also real, driven by EU wins plus the November 2025 SPS Analytics product launch that lifts average revenue per customer 8-12%.
SPSC traded at 47× forward EPS at the November 2023 peak and now sits at 9.8×. The 5-year average forward P/E is 28×. Even on conservative consensus 2026 EPS of 9.65 USD and a normalized multiple of 22-25×, the math points to 212-241 USD — versus today's 95 USD. That is 122-154% upside on multiple re-rate alone, no growth above the current 18% YoY guide required.
📉 The 3 Real Bear Points
SPS Commerce derives roughly 28% of revenue from its top-20 retailer customers. If three or four large retailers face another inventory destock cycle in 2026/2027, customer adds slow again — exactly the pattern that drove the 2024-2025 deceleration. The structural moat is real but the cyclical exposure is also real and recurs every 4-5 years.
Microsoft Dynamics 365 Supply Chain and Coupa both encroach on SPS Commerce's edges, particularly in the mid-market manufacturer segment. Microsoft is bundling EDI capabilities for free into existing Dynamics customer accounts. This is a long-tail competitive threat — SPS Commerce wins on retail-network breadth, but mid-market customers may choose the free Microsoft option if they only need basic EDI without retail-specific features.
The Q4/2025 transportation management system acquisition (490M USD, undisclosed seller) adds roughly 90M USD of annualized revenue but at significantly lower gross margin (52% versus SPSC core 67%). If the TMS integration consumes 8-12 months of management attention while EU rollouts demand execution, gross margin and operating leverage both compress through 2026 — directly contradicting the recurring-revenue acceleration narrative.
Valuation in Context
SPSC at 95 USD trades at 9.8× consensus 2026 EPS of 9.65 USD, 4.1× sales, and 4.6× book. Supply-chain SaaS peers: Manhattan Associates (38× fwd P/E, 11× sales), Coupa Software (acquired private, last public 24×), Descartes Systems (28× fwd P/E). A reasonable mid-cycle multiple for SPSC given 18% YoY recurring revenue growth and 92% recurring mix is 22-26× forward EPS — fair value 212-251 USD per share, 123-164% upside. Bull case with EU wins driving 22%+ growth and TMS lifting ARR per customer: 280-310 USD (195-226% upside). Bear case with another retail destock cycle and Microsoft mid-market share loss: 65-72 USD (24-32% downside). This is one of the most asymmetric setups in mid-cap US SaaS at current levels.
🗓️ Next 3 Catalyst Dates
- July 30, 2026: Q2/2026 earnings — first quarter with full Carrefour production volume, Tesco onboarding contribution, NRR trajectory
- September 2026: SPS Commerce User Conference annual event — typical venue for new product announcements and major customer references
- Q4/2026: TMS acquisition integration completion target — first standalone TMS-segment revenue disclosure expected
💬 Daniel's Take
SPS Commerce is one of those rare SaaS de-ratings where the operating thesis genuinely fixed itself before the multiple recovered. The deceleration narrative was real, but the EU expansion was a step-function change in TAM that the sell side has not yet modeled properly. Chad Collins buying 28k shares at 92 USD is the cleanest insider signal in mid-cap SaaS this year. I am long SPSC at a 2.5% portfolio weight, average cost 93 USD. My add trigger is back below 92 USD; my trim trigger is above 180 USD. The catalyst I am most focused on is the Q2/2026 earnings print — if NRR continues above 102% with Carrefour and Tesco contributing, the multiple gap closes hard. The bear case is real but priced in at 9.8× — this is one of those setups where you do not need everything to work, you just need the deceleration to stop accelerating.
Sources (3)
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
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