SPS Commerce (SPSC) Stock Forecast & Price Target

SPS Commerce Inc. has demonstrated robust financial performance, with total revenue rising by 16.0% year-over-year, complemented by a notable 20.8% increase in recurring revenue, highlighting the strength of its subscription-based model. The company’s gross margin of 71.2% reflects a solid year-over-year improvement, exceeding prior estimates, while the adjusted EBITDA margin is anticipated to expand further, indicating operational efficiency and profitability. With a normalization in organic customer additions projected for 2025, the outlook suggests that SPS Commerce is positioned for sustained growth, driven by effective cross-selling initiatives and a return to pre-pandemic customer acquisition levels.

SPS Commerce Inc. has revised its Adjusted EBITDA guidance down to $229.7-$231.7 million, reflecting a slight margin increase but indicating overall weakening financial performance compared to previous expectations. The company experienced a significant shortfall in its Carbon6 revenue recovery business, which was approximately 30% below projections, leading to a $3 million impact on total revenue and contributing to a lowered fiscal year 2025 revenue guidance to $751.6-$753.6 million, representing a decrease in expected growth. Cumulatively, these factors—including a 26% drop in shares following disappointing third-quarter results and an uncertain growth outlook—underscore a challenging financial environment exacerbated by economic headwinds and misalignment in management's expectations regarding seasonal performance and demand recovery.