# SPS Commerce (SPSC.US)

Canonical: https://gigainvestors.com/s/SPSC

Analysis as of: 2026-10-16T07:32:04.395Z. Financial observations: FY2009–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $86.82 per share; close as of 2026-10-15.

Estimated value: low $50.47 per share, central $71.61 per share, high $83.40 per share. Buy at or below the central value $71.61 per share. Valuation as of 2026-10-16T07:32:04.395Z; scenarios are not confidence intervals.

Expected annual return: 8.8% at the stated quote. About 8.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 1

- Operating margin variation: 0.26×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.04×

- FY2018: 0.11×

- FY2019: 0.14×

- FY2020: 0.16×

- FY2021: 0.14×

- FY2022: 0.16×

- FY2023: 0.14×

- FY2024: 0.14×

- FY2025: 0.16×

- LTM to Jun 2026: 0.16×

### moat: pass

- ROIC, median of available years: 35.1%

- ROIC, second-lowest year: 30.3%

- Typical minus recent gross margin: -2.2 pp

- Typical gross margin (annual median): 67.0%

- Recent gross margin (lower of latest and 3-year median): 69.2%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.1%

- ROIC including acquisitions, ten-year median: 17.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 7.5%

- FY2018: 31.7%

- FY2019: 34.8%

- FY2020: 35.4%

- FY2021: 44.2%

- FY2022: 38.5%

- FY2023: 37.9%

- FY2024: 30.3%

- FY2025: 31.0%

- LTM to Jun 2026: 39.2%

### economics: pass

- Owner earnings / net income, 5-yr: 1.24×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $417M

- Net income, five-year total: $336M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -1.8 pp

- Working capital / revenue, change between three-year averages: -14.0 pp

- Working capital / revenue, final three-year average: 7.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.12×

- FY2022: 1.15×

- FY2023: 1.21×

- FY2024: 1.29×

- FY2025: 1.34×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 7.5% vs 31.0%

- Per-share earnings: 0.14 to 2.04 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.1%

- Ordinary dilution, 5-year annual growth: 0.9%

- Market cap gain: $2.2B

- Cumulative retained earnings: $463M

- Diluted shares, 10-year annual growth: 1.1%

- Diluted shares, 5-year annual growth: 0.9%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 40.2%

- Per-share value change: $1.90

- Per-share value, starting three-year median: $0.14

- Per-share value, ending three-year median: $2.04

- Buybacks concentrated in cheaper years (correlation): 0.78

- Average buyback yield: 1.0%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: $614M

- Cumulative net income, 10 years: $442M

- ROIC, first three-year median: 7.5%

- ROIC, last three-year median: 31.0%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.17

- FY2017: -$0.07

- FY2018: $0.68

- FY2019: $0.94

- FY2020: $1.26

- FY2021: $1.21

- FY2022: $1.49

- FY2023: $1.76

- FY2024: $2.04

- FY2025: $2.46

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -7.3%

- Receivables to sales index (DSRI): 1.11×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 30.1%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.92×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.78×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -4.4%

- FY2017: -10.0%

- FY2018: -8.1%

- FY2019: -8.5%

- FY2020: -8.2%

- FY2021: -11.1%

- FY2022: -6.7%

- FY2023: -8.1%

- FY2024: -7.8%

- FY2025: -7.3%

## Holders

## Price story

Down 60% since Jul 2024 · "SPS Commerce (SPSC) Margin Compression Raises Questions for Premium Valuation" (finance.yahoo.com, Nov 2025) · sales +2.8%

Story as of 2026-10-16T09:59:37.334Z; price observation 2026-10-15.

Price needs cash profits to grow 10% a year for ten years

- 2025-10-14: Manhattan Associates, SPS Commerce 'Reset Growth Expectations,' Morgan Stanley Says ([finance.yahoo.com](https://finance.yahoo.com/news/manhattan-associates-sps-commerce-apos-154324839.html))

- 2025-11-01: SPS Commerce (SPSC) Margin Compression Raises Questions for Premium Valuation ([finance.yahoo.com](https://finance.yahoo.com/news/sps-commerce-spsc-margin-compression-131405666.html))

### Sales · FY2025–2026

sales +2.8%; source https://www.sec.gov/Archives/edgar/data/1092699/000109269926000012/spsc-20251231.htm; observed 2026-02-19.

- FY2017: $221M 

- FY2018: $248M 

- FY2019: $279M 

- FY2020: $313M 

- FY2021: $385M 

- FY2022: $451M 

- FY2023: $537M 

- FY2024: $638M 

- FY2025: $752M 

- FY2026: $772M 

### Gross margin · FY2026

gross margin 69.8%; source https://www.sec.gov/Archives/edgar/data/1092699/000109269926000012/spsc-20251231.htm; observed 2026-02-19.

- FY2017: 66.6% 

- FY2018: 67.1% 

- FY2019: 67.0% 

- FY2020: 68.1% 

- FY2021: 65.8% 

- FY2022: 66.1% 

- FY2023: 66.1% 

- FY2024: 67.0% 

- FY2025: 69.2% 

- FY2026: 69.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software application; annual sales are USD 751.5 million.

- Source: https://www.sec.gov/Archives/edgar/data/1092699/000109269926000012/spsc-20251231.htm (filed 2026-02-19); FY2025: revenue 751505000; grossProfit 519876000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SPSC.US: SPS Commerce, Inc. provides cloud-based supply chain management solutions in the United States. It offers solutions through SPS Commerce, a cloud-based platform that connects retailers, brands, distributors, manufacturers, and logistics providers, handling the complexity of modern commerce operations. The company also provides Fulfillment, a comprehensive solution designed to streamline supply chain operation that sends and receives order data, ensuring accurate execution of required processes from order to invoicing and revenue recovery through fully automated operations; and Analytics product that simplifies managing sell-through data from customers business partners that handle data acquisition, cleansing, normalization, and delivery. In addition, it offers various complimentary products, such as assortment product, which simplifies the communication of robust, accurate item data by automatically translating item attributes, and hierarchies through single connection across all sales channels; and relationship management product that allows organizations to accelerate digitization of their supply chain and improve collaboration with suppliers through change management, onboarding programs, and supplier score carding. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

### Why customers stay

Margins ranged from 66.1% to 69.2% during 2023–25; it earns 35.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2023: grossProfit / revenue = 66.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2024: grossProfit / revenue = 67%.

- Source: https://www.sec.gov/Archives/edgar/data/1092699/000109269926000012/spsc-20251231.htm (filed 2026-02-19); FY2025: grossProfit / revenue = 69.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); 10-year return on capital observations [[2017,0.0748602741223575],[2018,0.3174939389199158],[2019,0.34828970038750495],[2020,0.35356482440195425],[2021,0.4419483287762185],[2022,0.38540472724647157],[2023,0.3787876266713668],[2024,0.3033502402222606],[2025,0.3096038966281317],[2026,0.3920069646580521]]; median 0.3509272623947296. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 66% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1092699/000109269926000012/spsc-20251231.htm (filed 2026-02-19); Gross margin observations: [[2021,0.6582242340555862],[2022,0.6605156639866926],[2023,0.6608947495855916]]; range within 2 percentage points.

### Where the cash goes

Paid no dividends in 10 years; bought back USD 114.3 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2016: growth capex 0; upkeep 8008000; cash acquisitions 18032000; owner earnings 9038000. Growth capex plus acquisitions / owner earnings = 1.9951316662978535.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2017: growth capex 0; upkeep 7271000; owner earnings 2071000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2018: growth capex 1064000; upkeep 12686000; owner earnings 23872000. Growth capex / owner earnings = 0.04457104557640751.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2019: growth capex 0; upkeep 13585000; owner earnings 36565000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2020: growth capex 0; upkeep 16467000; owner earnings 47784000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2021: growth capex 0; upkeep 19588000; cash acquisitions 17066000; owner earnings 49923000. Growth capex plus acquisitions / owner earnings = 0.34184644352302546.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2022: growth capex 0; upkeep 19880000; cash acquisitions 91420000; owner earnings 63443000. Growth capex plus acquisitions / owner earnings = 1.4409785161483537.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2023: growth capex 0; upkeep 19761000; cash acquisitions 70218000; owner earnings 79415000. Growth capex plus acquisitions / owner earnings = 0.8841906440848706.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2024: growth capex 0; upkeep 20046000; cash acquisitions 147924000; owner earnings 99239000. Growth capex plus acquisitions / owner earnings = 1.4905833392113987.

- Source: https://www.sec.gov/Archives/edgar/data/1092699/000109269926000012/spsc-20251231.htm (filed 2026-02-19); FY2025: growth capex 0; upkeep 26524000; cash acquisitions 142628000; owner earnings 125073000. Growth capex plus acquisitions / owner earnings = 1.1403580309099486.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1092699/000109269926000012/spsc-20251231.htm (filed 2026-02-19); FY2025: cash repurchases 114277000 USD.

### Are managers owners

Insiders own 1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SPSC.US SharesStats.PercentInsiders = 1.0290000000000001 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 10% yearly over ten years; actual growth was 35.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); Ten-year compound average after fade. Initial solved rate 0.17173957548699248. Price 86.82; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.16011038046031 → FY2025 3.2920878079595703. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $31.19 per share

- 2016-11: $34.64 per share

- 2016-12: $34.95 per share

- 2017-01: $34.50 per share

- 2017-02: $27.67 per share

- 2017-03: $29.25 per share

- 2017-04: $27.63 per share

- 2017-05: $29.08 per share

- 2017-06: $31.88 per share

- 2017-07: $28.90 per share

- 2017-08: $30.46 per share

- 2017-09: $28.36 per share

- 2017-10: $24.58 per share

- 2017-11: $25.23 per share

- 2017-12: $24.30 per share

- 2018-01: $26.30 per share

- 2018-02: $30.01 per share

- 2018-03: $32.04 per share

- 2018-04: $34.29 per share

- 2018-05: $37.22 per share

- 2018-06: $36.74 per share

- 2018-07: $42.90 per share

- 2018-08: $49.14 per share

- 2018-09: $49.62 per share

- 2018-10: $46.55 per share

- 2018-11: $42.62 per share

- 2018-12: $41.19 per share

- 2019-01: $44.33 per share

- 2019-02: $53.39 per share

- 2019-03: $53.03 per share

- 2019-04: $51.87 per share

- 2019-05: $50.97 per share

- 2019-06: $51.11 per share

- 2019-07: $55.92 per share

- 2019-08: $50.54 per share

- 2019-09: $47.07 per share

- 2019-10: $52.77 per share

- 2019-11: $56.33 per share

- 2019-12: $55.42 per share

- 2020-01: $56.83 per share

- 2020-02: $52.60 per share

- 2020-03: $46.51 per share

- 2020-04: $55.51 per share

- 2020-05: $68.16 per share

- 2020-06: $75.12 per share

- 2020-07: $75.17 per share

- 2020-08: $79.88 per share

- 2020-09: $77.87 per share

- 2020-10: $85.59 per share

- 2020-11: $103.07 per share

- 2020-12: $108.59 per share

- 2021-01: $98.89 per share

- 2021-02: $100.73 per share

- 2021-03: $99.31 per share

- 2021-04: $102.44 per share

- 2021-05: $93.86 per share

- 2021-06: $99.85 per share

- 2021-07: $108.95 per share

- 2021-08: $135.53 per share

- 2021-09: $161.31 per share

- 2021-10: $152.73 per share

- 2021-11: $140.99 per share

- 2021-12: $142.35 per share

- 2022-01: $123.85 per share

- 2022-02: $129.85 per share

- 2022-03: $131.20 per share

- 2022-04: $119.63 per share

- 2022-05: $107.04 per share

- 2022-06: $113.05 per share

- 2022-07: $119.76 per share

- 2022-08: $122.12 per share

- 2022-09: $124.23 per share

- 2022-10: $126.52 per share

- 2022-11: $142.26 per share

- 2022-12: $128.43 per share

- 2023-01: $136.08 per share

- 2023-02: $150.64 per share

- 2023-03: $152.30 per share

- 2023-04: $147.30 per share

- 2023-05: $155.80 per share

- 2023-06: $192.06 per share

- 2023-07: $180.39 per share

- 2023-08: $186.13 per share

- 2023-09: $170.61 per share

- 2023-10: $160.34 per share

- 2023-11: $172.28 per share

- 2023-12: $193.84 per share

- 2024-01: $183.80 per share

- 2024-02: $185.16 per share

- 2024-03: $184.90 per share

- 2024-04: $173.87 per share

- 2024-05: $188.09 per share

- 2024-06: $188.16 per share

- 2024-07: $215.42 per share

- 2024-08: $199.74 per share

- 2024-09: $194.17 per share

- 2024-10: $165.00 per share

- 2024-11: $193.07 per share

- 2024-12: $183.99 per share

- 2025-01: $184.68 per share

- 2025-02: $133.20 per share

- 2025-03: $132.73 per share

- 2025-04: $143.51 per share

- 2025-05: $140.76 per share

- 2025-06: $136.09 per share

- 2025-07: $108.87 per share

- 2025-08: $110.30 per share

- 2025-09: $104.14 per share

- 2025-10: $82.24 per share

- 2025-11: $83.32 per share

- 2025-12: $89.13 per share

- 2026-01: $89.26 per share

- 2026-02: $56.51 per share

- 2026-03: $55.67 per share

- 2026-04: $56.12 per share

- 2026-05: $56.75 per share

- 2026-06: $57.17 per share

- 2026-07: $73.39 per share

- 2026-08: $85.40 per share

- 2026-09: $82.44 per share

- 2026-10: $86.82 per share

## Annual estimated value (USD per share)

- FY2016: low $5.91 per share, central $6.19 per share, high $6.56 per share

- FY2017: low $6.84 per share, central $7.15 per share, high $7.57 per share

- FY2018: low $7.58 per share, central $7.94 per share, high $8.43 per share

- FY2019: low $10.70 per share, central $12.82 per share, high $14.05 per share

- FY2020: low $16.26 per share, central $21.09 per share, high $23.90 per share

- FY2021: low $25.12 per share, central $32.98 per share, high $37.57 per share

- FY2022: low $27.11 per share, central $36.09 per share, high $41.41 per share

- FY2023: low $29.10 per share, central $32.14 per share, high $36.18 per share

- FY2024: low $33.27 per share, central $37.02 per share, high $42.02 per share

- FY2025: low $35.57 per share, central $39.98 per share, high $45.85 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1092699/000109269926000012/spsc-20251231.htm); period 2025-12-31, filed 2026-02-19.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.