SPS Commerce Inc. Common Stock (SPSC)

FairStock Score: 71/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a patient investor, I see SPS Commerce as a cloud supply-chain connective tissue for retailers and suppliers. The financial foundation is conservative: debt to equity is only 0.01, Piotroski is 8/9, Altman Z is 10.71, and trailing free cash flow is $198.7M, a 6.6% FCF yield on the $3.0B market cap. Long term, FairStock's Lynch category calls it a stalwart, with 15.4% annual profit growth and 19.2% revenue growth over five years. Filed results support that history: FY2025 revenue was $751.5M, net income $93.3M, and diluted EPS $2.46, up from FY2024 revenue $637.8M, net income $77.1M, and EPS $2.04. However, the latest quarter is troubling. In fiscal Q2 2026, revenue was $197.8M versus $187.4M in fiscal Q2 2025, but net income collapsed to $6.9M from $19.7M, and diluted EPS fell to $0.19 from $0.52; net margin was only 3.47%. Return on equity of 8.26% and return on capital of 6.80% are not exceptional. Valuation is the rub: at $83.76 on 2026-10-13, FairStock shows P/E 40.27, P/B 3.23, EV/EBITDA 15.55, and a Graham Number of $34.84, leaving a -140.41% margin of safety. I admire the balance sheet and cash generation, but I would want evidence that the profit drop is temporary before paying a premium multiple.

In plain English: SPS Commerce helps retailers and suppliers share supply-chain order data through cloud software. The business is financially sturdy, with little debt and solid cash flow, but profit fell sharply in the latest quarter and sales growth has slowed. At the recent price, the shares look expensive compared with what the company earns and owns.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer