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Investing.com - Needham lowered its price target on SPS Commerce (NASDAQ:SPSC) to $160.00 from $210.00 on Thursday, while maintaining a Buy rating on the supply chain software provider. The company, currently valued at $5.3 billion, has seen 8 analysts revise their earnings expectations downward for the upcoming period, according to InvestingPro data.
The price target reduction follows SPS Commerce’s second-quarter results, which outperformed Needham’s estimates and showed positive customer metrics. While revenue landed on the lower end of the company’s historical reported range, InvestingPro data shows the company maintains strong revenue growth of 19.46% and a GOOD Financial Health Score, suggesting resilient fundamentals despite market pressures.
Needham attributed the softer performance to macroeconomic and tariff-driven concerns that are negatively impacting supply chain software purchasing decisions. While retailers continue seeking higher levels of supply chain automation from suppliers, the uncertain tariff environment is causing suppliers to scrutinize new software expansions more carefully.
The research firm noted that mid-market ERP replacements, which typically drive new and larger SPS Commerce customers, remain slower than recent levels. This has led the company to set new medium growth targets of at least high single digits.
These growth projections fall modestly below Needham’s expectations of 10%+ growth, though the firm highlighted that SPS Commerce anticipates better-than-expected annual adjusted EBITDA expansion of 200 basis points.
In other recent news, SPS Commerce reported its second-quarter 2025 earnings, exceeding analyst expectations. The company achieved an earnings per share (EPS) of $1.00, surpassing the forecasted $0.91. Revenue was reported at $187.4 million, slightly higher than the anticipated $185.82 million. Despite these positive results, Loop Capital downgraded SPS Commerce from Buy to Hold, citing growth concerns. The firm also significantly reduced its price target for the company from $175.00 to $120.00. These developments highlight the mixed reactions from analysts and investors despite the company’s strong financial performance.
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