NasdaqGS:SPSC

Stock Analysis Report

Executive Summary

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide.


Snowflake Analysis

Flawless balance sheet with proven track record.


Similar Companies

Share Price & News

How has SPS Commerce's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SPSC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

7.6%

SPSC

8.6%

US Software

9.4%

US Market


1 Year Return

-3.7%

SPSC

13.2%

US Software

-6.8%

US Market

Return vs Industry: SPSC underperformed the US Software industry which returned 13.2% over the past year.

Return vs Market: SPSC exceeded the US Market which returned -6.8% over the past year.


Shareholder returns

SPSCIndustryMarket
7 Day7.6%8.6%9.4%
30 Day10.2%1.9%-3.9%
90 Day-11.4%-4.7%-16.5%
1 Year-3.7%-3.7%14.4%13.2%-4.8%-6.8%
3 Year71.2%71.2%116.0%106.8%23.4%15.2%
5 Year50.5%50.5%180.5%160.6%41.3%25.7%

Price Volatility Vs. Market

How volatile is SPS Commerce's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is SPS Commerce undervalued compared to its fair value and its price relative to the market?

13.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SPSC ($50.2) is trading below our estimate of fair value ($57.86)

Significantly Below Fair Value: SPSC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SPSC is poor value based on its PE Ratio (52.2x) compared to the Software industry average (43x).

PE vs Market: SPSC is poor value based on its PE Ratio (52.2x) compared to the US market (13.6x).


Price to Earnings Growth Ratio

PEG Ratio: SPSC is poor value based on its PEG Ratio (5.1x)


Price to Book Ratio

PB vs Industry: SPSC is overvalued based on its PB Ratio (4.9x) compared to the US Software industry average (4.5x).


Next Steps

Future Growth

How is SPS Commerce forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

10.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPSC's forecast earnings growth (10.1% per year) is above the savings rate (1.7%).

Earnings vs Market: SPSC's earnings (10.1% per year) are forecast to grow slower than the US market (11.4% per year).

High Growth Earnings: SPSC's earnings are forecast to grow, but not significantly.

Revenue vs Market: SPSC's revenue (9.3% per year) is forecast to grow faster than the US market (6.9% per year).

High Growth Revenue: SPSC's revenue (9.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SPSC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has SPS Commerce performed over the past 5 years?

51.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPSC has high quality earnings.

Growing Profit Margin: SPSC's current net profit margins (12.1%) are higher than last year (9.6%).


Past Earnings Growth Analysis

Earnings Trend: SPSC's earnings have grown significantly by 51.8% per year over the past 5 years.

Accelerating Growth: SPSC's earnings growth over the past year (41.2%) is below its 5-year average (51.8% per year).

Earnings vs Industry: SPSC earnings growth over the past year (41.2%) exceeded the Software industry 18.4%.


Return on Equity

High ROE: SPSC's Return on Equity (9.5%) is considered low.


Next Steps

Financial Health

How is SPS Commerce's financial position?


Financial Position Analysis

Short Term Liabilities: SPSC's short term assets ($291.6M) exceed its short term liabilities ($68.0M).

Long Term Liabilities: SPSC's short term assets ($291.6M) exceed its long term liabilities ($24.5M).


Debt to Equity History and Analysis

Debt Level: SPSC is debt free.

Reducing Debt: SPSC has not had any debt for past 5 years.

Debt Coverage: SPSC has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SPSC has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is SPS Commerce's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate SPSC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate SPSC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SPSC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SPSC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SPSC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.2yrs

Average management tenure


CEO

Archie Black (57yo)

19.25s

Tenure

US$4,520,963

Compensation

Mr. Archie C. Black has been the President and Chief Executive Officer at SPS Commerce, Inc. since 2001. Mr. Black is responsible for the management and strategic direction of Sps Commerce Inc. He has over ...


CEO Compensation Analysis

Compensation vs Market: Archie's total compensation ($USD4.52M) is about average for companies of similar size in the US market ($USD4.68M).

Compensation vs Earnings: Archie's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Archie Black
President19.25yrsUS$4.52m0.017% $302.9k
Kimberly Nelson
Executive VP & CFO12.42yrsUS$2.19m0.20% $3.5m
James Frome
Executive VP & COO7.67yrsUS$2.41m0.0044% $78.2k
Jamie Thingelstad
Senior VP & CTO6.67yrsno datano data
Dan Juckniess
Senior VP & Chief Sales Officer4.08yrsno datano data
Mark O'Leary
Senior VP & Chief Marketing Officer1yrno datano data

7.2yrs

Average Tenure

52.5yo

Average Age

Experienced Management: SPSC's management team is seasoned and experienced (7.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Archie Black
President19.25yrsUS$4.52m0.017% $302.9k
Philip Soran
Independent Director9.75yrsUS$183.66k0.041% $726.4k
Tami Reller
Independent Non-Executive Chairman1.92yrsUS$183.03k0.010% $183.5k
Sven Wehrwein
Independent Director11.75yrsUS$187.83k0.041% $726.4k
Martin Leestma
Independent Director14.08yrsUS$181.02k0.038% $674.7k
James Ramsey
Independent Director6.08yrsUS$178.95k0.015% $262.6k
Marty Réaume
Independent Director2.08yrsUS$274.87k0.0050% $87.0k

9.8yrs

Average Tenure

57yo

Average Age

Experienced Board: SPSC's board of directors are considered experienced (9.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

SPS Commerce, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: SPS Commerce, Inc.
  • Ticker: SPSC
  • Exchange: NasdaqGS
  • Founded: 1987
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$1.758b
  • Shares outstanding: 35.02m
  • Website: https://www.spscommerce.com

Number of Employees


Location

  • SPS Commerce, Inc.
  • 333 South Seventh Street
  • Suite 1000
  • Minneapolis
  • Minnesota
  • 55402
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPSCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDApr 2010
S86BST (Boerse-Stuttgart)YesCommon StockDEEURApr 2010

Biography

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It offers solutions through the SPS Commerce platform, a cloud-based platform that enhances the way retailers, suppliers, grocers, distributors, and logistics firms manage and fulfill orders, administer sell-through performance, and source new items. The company offers Trading Partner Community solution, which enables retailers, grocers, and distributors to introduce changes to their supply chain requirements to their trading partner community, and onboard new vendors to receive their first orders; Trading Partner Fulfillment solution that provides fulfillment automation and replaces or augments an organization’s existing staff and trading partner electronic communication infrastructure; and Trading Partner Assortment solution to manage individual attributes associated with each item a retailer or supplier sells. It also provides Trading Partner Analytics solution, which consists of data analytics applications that allow customers to enhance their visibility and analysis of their supply chains; Trading Partner Sourcing solutions that enables retailers to source providers of new items, suppliers to connect with new retailers, and retailing community; and Other Trading Partner Solutions, such as barcode labeling, planogram services, and scan and pack application that helps trading partners process information to streamline the picking and packaging process. The company sells its solutions through retailer, supplier, and logistic sales representatives to small- to mid-sized suppliers, as well as retailers, distributors, third-party logistics providers, and other trading partners. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 05:39
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.