- SPS Commerce reported strong second quarter 2025 results, with revenue rising to US$187.4 million and net income increasing to US$19.73 million, and updated its buyback progress and raised full-year revenue and earnings guidance on July 30, 2025.
- Alongside these positive results, the company's full-year outlook now anticipates double-digit percentage growth rates in both revenue and net income per diluted share, pointing to management's confidence in ongoing business momentum.
- With SPS Commerce raising its full-year outlook, we'll examine how this guidance increase may influence the investment narrative going forward.
Uncover the next big thing with financially sound penny stocks that balance risk and reward.
SPS Commerce Investment Narrative Recap
To be a shareholder in SPS Commerce, you need to believe in the continued digital transformation of the retail supply chain and SPS’s ability to grow its network-driven, recurring revenue model. The recent upbeat earnings and increased guidance reinforce management’s confidence in business momentum, but do not meaningfully change the near-term catalysts or key risks: macroeconomic uncertainty around supplier tech spending and price competition still loom large.
Among the recent company developments, the updated full-year guidance stands out as most relevant to investor interests. SPS Commerce now expects revenue between US$759.0 million and US$763.0 million, a 19% to 20% year-over-year increase, alongside double-digit EPS growth. This raised outlook highlights ongoing demand for supply chain digitalization, a critical short-term growth catalyst for the business.
In contrast, investors should also be aware of increased supplier caution on technology spending, which...
Read the full narrative on SPS Commerce (it's free!)
SPS Commerce's outlook anticipates $966.0 million in revenue and $139.1 million in earnings by 2028. This assumes an annual revenue growth rate of 11.1% and a $56.2 million increase in earnings from the current level of $82.9 million.
Uncover how SPS Commerce's forecasts yield a $152.36 fair value, a 40% upside to its current price.
Exploring Other Perspectives
Three fair value forecasts from the Simply Wall St Community before the latest results range from US$143.31 to US$182.03. As you consider these diverse approaches, keep in mind the ongoing catalyst for growth is SPS Commerce’s recurring revenue model supported by digital adoption trends.
Explore 3 other fair value estimates on SPS Commerce - why the stock might be worth as much as 68% more than the current price!
Build Your Own SPS Commerce Narrative
Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.
- A great starting point for your SPS Commerce research is our analysis highlighting 4 key rewards that could impact your investment decision.
- Our free SPS Commerce research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SPS Commerce's overall financial health at a glance.
Contemplating Other Strategies?
Opportunities like this don't last. These are today's most promising picks. Check them out now:
- Explore 26 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research.
- We've found 19 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
- Rare earth metals are the new gold rush. Find out which 27 stocks are leading the charge.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com