SPS Commerce (SPSC) Stock Forecast & Price Target

SPS Commerce Inc. demonstrated robust financial performance with total revenue increasing by 16.0% year-over-year, driven by a significant organic recurring revenue growth of 10.5% and a strong 20.8% growth in recurring revenue. The company achieved an adjusted EBITDA of $246.3-$266.7 million, reflecting an 11.2% increase, and a notable gross margin of 71.2%, which surpassed expectations and increased by 190 basis points year-over-year. Additionally, management indicated a positive trajectory for customer additions, forecasting a return to pre-pandemic annual levels by 2025, supported by an expected expansion in the adjusted EBITDA margin to approximately 32.7%.

SPS Commerce experienced a downward adjustment in its financial projections, with adjusted EBITDA guidance lowered to $229.7-$231.7 million, reflecting a declining margin compared to previous estimates. The company faced significant challenges in its Carbon6 revenue recovery business, which fell 30% short of expectations, contributing to total revenues that underperformed consensus estimates by $2.7 million and reflecting broader economic uncertainties. Furthermore, the reduction in fiscal year 2025 revenue guidance to $751.6-$753.6 million, along with a negative outlook for growth in 2026, underscores a continued struggle with seasonality trends and operational inconsistencies.