SPS Commerce, Inc. (NASDAQ:SPSC) Has Attractive Fundamentals

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SPS Commerce, Inc. (NASDAQ:SPSC) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of SPSC, it is a company with great financial health as well as a a great history of performance. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on SPS Commerce here.

Flawless balance sheet with solid track record

In the past couple of years, SPSC has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. Not only did SPSC outperformed its past performance, its growth also surpassed the Software industry expansion, which generated a 21% earnings growth. This is what investors like to see! SPSC’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. SPSC currently has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. SPSC has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.

NasdaqGS:SPSC Income Statement, February 25th 2019
NasdaqGS:SPSC Income Statement, February 25th 2019

Next Steps:

For SPS Commerce, there are three fundamental aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for SPSC’s future growth? Take a look at our free research report of analyst consensus for SPSC’s outlook.
  2. Valuation: What is SPSC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SPSC is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SPSC? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.