Results: SPS Commerce, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for SPS Commerce, Inc. (NASDAQ:SPSC) shareholders, because the company has just released its latest first-quarter results, and the shares gained 8.5% to US$138. It looks like a credible result overall - although revenues of US$182m were what the analysts expected, SPS Commerce surprised by delivering a (statutory) profit of US$0.58 per share, an impressive 50% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following the latest results, SPS Commerce's eleven analysts are now forecasting revenues of US$760.5m in 2025. This would be a decent 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 4.2% to US$2.05 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$758.1m and earnings per share (EPS) of US$1.92 in 2025. So the consensus seems to have become somewhat more optimistic on SPS Commerce's earnings potential following these results.

View our latest analysis for SPS Commerce

The average the analysts price target fell 8.2% to US$179, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on SPS Commerce, with the most bullish analyst valuing it at US$210 and the most bearish at US$159 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 18% growth on an annualised basis. That is in line with its 17% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it's pretty clear that SPS Commerce is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SPS Commerce's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for SPS Commerce going out to 2027, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.