SAP sued by o9 Solutions over alleged trade secret theft
Investing.com - Morgan Stanley downgraded SPS Commerce (NASDAQ:SPSC) from Overweight to Equalweight on Tuesday, while significantly reducing its price target to $100.00 from $140.00. The stock currently trades at $81.65, down over 55% year-to-date and significantly below its 52-week high of $201.06. According to InvestingPro data, the stock appears undervalued compared to its Fair Value estimate.
The downgrade comes despite Morgan Stanley’s continued belief that the total addressable market for SPS Commerce is larger than investors appreciate, a view reinforced by better-than-expected organic net customer additions of 350 and 600 over the past two quarters.
Morgan Stanley also expects margin expansion to continue exceeding expectations, maintaining part of its previous bullish thesis on the supply chain management software provider.
The firm cited near-term growth constraints as the primary reason for the rating change, noting that tariffs and challenging macro conditions in key end markets have led to increased spending scrutiny among SPS Commerce’s customers.
According to Morgan Stanley, these headwinds have resulted in suppliers purchasing fewer retailer connections and reducing document volumes through monthly contracts, while retailers delay enablement campaigns due to overly optimistic near-term growth expectations.
In other recent news, SPS Commerce reported its third-quarter 2025 earnings, which showed an earnings per share of $1.13, surpassing analyst forecasts of $1.00 by 13%. However, the company’s revenue came in at $189.9 million, falling short of the expected $192.68 million, marking a revenue surprise of -1.44%. Following these results, several analyst firms made adjustments to their ratings and price targets for the company. Needham lowered its price target for SPS Commerce to $110 from $160 while maintaining a Buy rating, citing a revenue miss due to issues in the acquired Revenue Recovery business. Cantor Fitzgerald downgraded the stock from Overweight to Neutral, cutting its price target to $80 from $135, highlighting "mixed-to-negative" third-quarter results and a weak outlook. Additionally, Stifel downgraded SPS Commerce from Buy to Hold, reducing its price target to $80 from $150, amid concerns over macroeconomic challenges and spending scrutiny in the retail sector. These developments reflect the company’s mixed performance and the varying perspectives of analysts on its future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.