Figma Shares Indicated To Open $105/$110
On Wednesday, Needham reaffirmed its Buy rating on SPS Commerce (NASDAQ:SPSC) with a steady price target of $210.00, representing significant upside from the current trading price of $135. According to InvestingPro data, analyst targets range from $163 to $245, with the company maintaining a "Great" financial health score. The endorsement follows a recent non-deal roadshow (NDR) in Boston with SPS Commerce CEO Chad Collins and CFO Kim Nelson. Analysts highlighted the company’s near-term growth prospects, despite a forecasted slowdown in organic revenue growth from over 14% in fiscal year 2024 to approximately 10.5% in fiscal year 2025. The company has demonstrated strong performance with an 18.78% revenue growth over the last twelve months and maintains a healthy balance sheet with more cash than debt.
The report noted that while the macroeconomic environment is creating some challenges for the mid-market and Analytics sales, there are positive signs ahead. Opportunities in Europe and a growing platform-driven cross-sell initiative are expected to support organic revenue growth, which is seen as likely to remain in the double digits. The analysis suggests that the anticipated 10% growth rate could represent a baseline rather than a decline to single-digit figures in fiscal year 2026.
Needham anticipates that strategic mergers and acquisitions will further bolster SPS Commerce’s platform strategy. This approach is aimed at navigating an increasingly complex retail supply chain and is expected to lead to more sustainable organic growth than current market expectations may suggest.
The report also touched on the subject of tariffs, which have been a point of discussion for many companies with international supply chains. However, the analysts believe that tariffs are not having an impact on SPS Commerce’s operations. The company appears to be well-positioned to continue its growth trajectory despite the broader economic headwinds affecting certain segments of its business. While currently trading below its InvestingPro Fair Value, investors should note the company’s high valuation multiples. For deeper insights into SPS Commerce’s valuation and 12+ additional ProTips, check out the comprehensive analysis available on InvestingPro.
In other recent news, SPS Commerce reported its fourth-quarter earnings, with an earnings per share (EPS) of $0.89, slightly surpassing the consensus estimate of $0.87. The company’s revenue for the quarter reached $170.9 million, exceeding the expected $168.76 million and representing an 18% increase from the same period in 2023. However, the company’s guidance for the first quarter of 2025 fell short of expectations, with an EPS range of $0.82-$0.84 compared to the consensus estimate of $0.92. Revenue projections for Q1 2025 are set between $178.5-180 million, aligning closely with the expected $179.2 million. For the full year of 2025, SPS Commerce expects an EPS of $3.78-$3.84 and revenue between $758-763 million, slightly below the consensus estimates.
Analyst reactions to the guidance varied, with Citi and Needham maintaining Buy ratings but lowering their price targets to $200 and $210, respectively. Piper Sandler adjusted its price target to $175 with a Neutral rating, citing concerns about net customer additions. DA Davidson retained a Buy rating and a $245 price target, citing a stronger EBITDA margin and an increased total addressable market (TAM) as positive indicators. Meanwhile, Stifel revised its price target to $200, emphasizing the company’s new TAM framework and its potential for growth. Additionally, SPS Commerce announced changes to its board of directors, appointing Razat Gaurav as a new independent director, effective March 2025.
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