Sps Commerce Inc

SPS Commerce maintains a conservative capital structure with zero debt and a debt-to-equity ratio of 0.0. The company holds $154.3 million in cash and equivalents against total liabilities of $199.0 million, resulting in a current ratio of 2.12. Liquidity risk is assessed as low, supported by strong operating cash flow of $55.6 million and free cash flow of $48.5 million in Q1 2026. The balance sheet is equity-heavy, with total equity of $962.2 million representing the majority of total assets of $1.16 billion.

Profitability metrics show a gross profit of $132.9 million on revenue of $192.1 million, yielding a gross margin of approximately 69.2%. Operating income stands at $24.6 million, translating to an operating margin of 12.8%, while net income is $19.7 million, resulting in a net margin of 10.3%. Return on equity is 2.05% and return on assets is 1.7%, reflecting the large equity base relative to current earnings. The company trades at a price-to-earnings ratio of 100.28 and an EV-to-EBITDA of 60.02, indicating high valuation multiples relative to current earnings power.

Sps Commerce Inc (SPSC) has seen a notable influx of new institutional holders, signaling growing interest in the company’s equity. Recent data reveals multiple new positions established as of late 2024 and early 2026, including a significant stake of approximately 5.8 million shares valued at nearly $1.1 billion reported as of June 30, 2024. Additional new holders emerged by March 31, 2026, with positions ranging from roughly 219,000 to 1.5 million shares. This accumulation of new ownership suggests that investors are increasingly allocating capital to SPSC, potentially reflecting confidence in its market position or future growth trajectory. Concurrently, the company’s risk profile has been formally updated, with dilution risk now classified as "medium" and liquidity risk assessed as "low." These new risk assessments provide a clearer framework for evaluating the financial stability and capital structure of Sps Commerce. The "medium" dilution risk indicates potential future share issuance or options that could impact per-share value, while the "low" liquidity risk suggests the company maintains sufficient access to cash or credit to meet its short-term obligations. These classifications help investors gauge the balance between growth financing needs and financial resilience. In terms of business classification, Sps Commerce has been explicitly categorized under the "Application Software" activity within the broader "Technology" economic sector. This taxonomy update aligns the company with its core operational focus, providing clarity for sector-based analysis and benchmarking. By defining SPSC as an application software provider, the classification underscores its role in delivering technology solutions, which is central to its value proposition and competitive landscape. This categorization aids in comparing its performance and risks against peers in the software industry. The company continues to be followed by five analysts and has a top holder count of 31, indicating a moderate level of institutional engagement and market scrutiny. While the officer count is listed as zero in the current data, the presence of multiple analysts and a diverse set of top holders suggests ongoing professional oversight and investor interest. The combination of new institutional inflows, updated risk metrics, and clear sector classification provides a more comprehensive view of Sps Commerce’s current standing, highlighting both the opportunities and risks associated with its position in the technology sector.

Revenue grew at a 9.0% CAGR from FY2023 to FY2025, demonstrating consistent top-line expansion over the two-year period.

Operating margin of 12.8% significantly exceeds the 1.8% software cohort median, indicating superior profitability relative to peers.

Cash conversion ratio of 2.82 is best-in-class compared to the 0.92 software cohort median, highlighting efficient cash generation.

Analysts project 38.5% upside to a mean price target of $73.93, suggesting significant undervaluation relative to current market price.

The company maintains a low leverage band with a debt-to-equity ratio of 0.20, reducing financial risk.

Return on equity of 2.05% trails the 2.8% software cohort median, indicating less efficient use of shareholder capital.

The company faces medium dilution risk, which could negatively impact existing shareholder value and earnings per share.

Revenue $192.1M; Operating income $24.6M.

• ▍Revenue $192.1M
• ▍Operating income $24.6M
• ▍Net margin 10.3%

Revenue $558.9M; Operating income $83.6M.

• ▍Revenue $558.9M
• ▍Operating income $83.6M
• ▍Net margin 12.1%

Revenue $368.9M; Operating income $52.4M.

• ▍Revenue $368.9M
• ▍Operating income $52.4M
• ▍Net margin 11.4%

Revenue $751.5M; Operating income $118.3M.

• ▍Revenue $751.5M
• ▍Operating income $118.3M
• ▍Net margin 12.4%

Revenue $637.8M; Operating income $88.9M.

• ▍Revenue $637.8M
• ▍Operating income $88.9M
• ▍Net margin 12.1%

Revenue $637.8M; Operating income $88.9M.

• ▍Revenue $637.8M
• ▍Operating income $88.9M
• ▍Net margin 12.1%

Revenue $536.9M; Operating income $77.2M.

• ▍Revenue $536.9M
• ▍Operating income $77.2M
• ▍Net margin 12.3%

Revenue $536.9M; Operating income $77.2M.

• ▍Revenue $536.9M
• ▍Operating income $77.2M
• ▍Net margin 12.3%