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Investing.com - Cantor Fitzgerald downgraded SPS Commerce (NASDAQ:SPSC) from Overweight to Neutral on Friday, while significantly reducing its price target to $80.00 from $135.00. The stock is currently trading near $104, just above its 52-week low of $102.05, after plunging over 43% year-to-date according to InvestingPro data.
The rating change follows what the research firm described as "mixed-to-negative" third-quarter results from the supply chain management software provider, with recurring revenue falling short of consensus estimates amid multiple headwinds. Despite these challenges, InvestingPro data shows the company remains profitable with a solid financial health score, though its PEG ratio of 3.73 indicates it’s trading at a high valuation relative to its growth rate.
While SPS Commerce managed to partially offset revenue disappointments with better profitability metrics, the company ultimately missed free cash flow expectations for the quarter, according to Cantor Fitzgerald.
The downgrade was further prompted by SPS Commerce’s weaker fourth-quarter guidance, which fell below what was previously implied in the company’s fiscal year 2025 outlook provided after the second quarter.
Cantor Fitzgerald also noted that SPS Commerce’s initial growth outlook for 2026 missed Street expectations, contributing to the firm’s decision to reduce its outlook and adjust its near-term investment thesis on the stock. Interestingly, InvestingPro’s Fair Value analysis suggests the stock may be undervalued at current levels, with 12 additional ProTips available to subscribers who want deeper insights into SPSC’s financial health and growth prospects.
In other recent news, SPS Commerce reported its third-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $1.13, which is 13% higher than the forecasted $1.00. However, the company’s revenue came in at $189.9 million, slightly below the anticipated $192.68 million, marking a revenue shortfall of 1.44%. In another development, Stifel downgraded SPS Commerce’s stock from Buy to Hold, adjusting the price target from $150.00 to $80.00. This downgrade was influenced by challenges in the retail sector and increased scrutiny on spending, which may affect SPS Commerce’s revenue performance in the near and mid-term. These developments highlight the mixed financial performance and market sentiment surrounding SPS Commerce.
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