SPS Commerce (SPSC) Stock Forecast & Price Target

SPS Commerce has demonstrated robust financial performance with total revenue increasing by 16% year-over-year, driven by a significant 20.8% growth in recurring revenue and an adjusted EBITDA forecast between $246.3 million and $266.7 million, reflecting an 11.2% increase. The company has also reported an improved gross margin of 71.2%, which is 190 basis points above the previous year and 120 basis points higher than estimates, indicating efficient cost management and a solid business model. Additionally, organic customer additions are projected to normalize towards pre-pandemic levels, with management anticipating approximately 1,300 annual customer additions by 2025, enhancing the company's long-term growth outlook.

SPS Commerce's financial outlook has weakened significantly, with adjusted EBITDA guidance reduced to $229.7-$231.7 million, reflecting a decrease in expected margins compared to prior guidance, while full-year revenue guidance has been lowered to $751.6-$753.6 million, indicating a slowdown in growth from previously projected figures. Furthermore, the company reported total revenue of $189.9 million, which fell short of consensus estimates by $2.7 million due to weaker seasonality trends and disappointing contributions from the Carbon6 revenue recovery business, which was 30% below expectations. This negative trend has resulted in a ~26% decline in shares following the revenue miss, compounded by shifts in enablement campaigns and ongoing macroeconomic challenges impacting performance.