SPS Commerce (SPSC) Stock Forecast & Price Target

SPS Commerce Inc is demonstrating a strong financial performance with total revenue increasing by 16.0% year-over-year, driven by a 20.8% growth in recurring revenue, showcasing the company's robust subscription-based model. The gross margin has improved to 71.2%, reflecting an increase of 190 basis points year-over-year, which not only exceeds previous estimates but also indicates effective cost management and operational efficiency. Additionally, the company anticipates a significant rise in organic customer additions to approximately 1,300 annually, suggesting a positive trend toward pre-pandemic levels and supporting its long-term growth outlook.

SPS Commerce Inc has revised its adjusted EBITDA guidance downwards to a range of $229.7-$231.7 million, reflecting a slight margin increase but indicating pressure on profitability amidst broader challenges. Revenue for the third quarter was reported at $189.9 million, falling short of consensus expectations by $2.7 million, primarily due to weaker seasonality trends and disappointing performance in the Carbon6 revenue recovery segment. Additionally, the company's fiscal year 2025 revenue guidance has been reduced to $751.6-$753.6 million, indicating a deceleration in expected growth from previously projected figures, as ongoing macroeconomic headwinds continue to impact performance.