SPS COMMERCE INC (SPSC)
US78463M1071 - Common Stock
We assign a fundamental rating of 7 out of 10 to SPSC. SPSC was compared to 277 industry peers in the Software industry. SPSC scores excellent points on both the profitability and health parts. This is a solid base for a good stock. SPSC shows excellent growth, but is valued quite expensive already. These ratings could make SPSC a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
SPSC had positive earnings in the past year.
SPSC had a positive operating cash flow in the past year.
Each year in the past 5 years SPSC has been profitable.
SPSC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
SPSC has a Return On Assets of 8.16%. This is amongst the best in the industry. SPSC outperforms 86.96% of its industry peers.
With an excellent Return On Equity value of 10.03%, SPSC belongs to the best of the industry, outperforming 82.97% of the companies in the same industry.
SPSC has a Return On Invested Capital of 8.29%. This is amongst the best in the industry. SPSC outperforms 85.14% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SPSC is in line with the industry average of 10.18%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.16% | ||
| ROE | 10.03% | ||
| ROIC | 8.29% |
ROA(3y)7.81%
ROA(5y)7.92%
ROE(3y)9.78%
ROE(5y)9.93%
ROIC(3y)8.88%
ROIC(5y)8.62%
1.3 Margins
Looking at the Profit Margin, with a value of 12.22%, SPSC belongs to the top of the industry, outperforming 82.25% of the companies in the same industry.
In the last couple of years the Profit Margin of SPSC has grown nicely.
SPSC has a Operating Margin of 13.54%. This is amongst the best in the industry. SPSC outperforms 85.51% of its industry peers.
In the last couple of years the Operating Margin of SPSC has grown nicely.
SPSC has a Gross Margin (66.00%) which is in line with its industry peers.
In the last couple of years the Gross Margin of SPSC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.54% | ||
| PM (TTM) | 12.22% | ||
| GM | 66% |
OM growth 3Y-3.6%
OM growth 5Y5.99%
PM growth 3Y-5.63%
PM growth 5Y4.95%
GM growth 3Y-0.98%
GM growth 5Y-0.3%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SPSC is destroying value.
The number of shares outstanding for SPSC has been increased compared to 1 year ago.
Compared to 5 years ago, SPSC has more shares outstanding
There is no outstanding debt for SPSC. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
SPSC has an Altman-Z score of 29.61. This indicates that SPSC is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SPSC (29.61) is better than 97.83% of its industry peers.
There is no outstanding debt for SPSC. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 29.61 |
ROIC/WACC0.84
WACC9.91%
2.3 Liquidity
A Current Ratio of 3.13 indicates that SPSC has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.13, SPSC is in the better half of the industry, outperforming 75.36% of the companies in the same industry.
SPSC has a Quick Ratio of 3.13. This indicates that SPSC is financially healthy and has no problem in meeting its short term obligations.
SPSC has a Quick ratio of 3.13. This is in the better half of the industry: SPSC outperforms 75.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.13 | ||
| Quick Ratio | 3.13 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 23.98% over the past year.
SPSC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 24.27% yearly.
Looking at the last year, SPSC shows a quite strong growth in Revenue. The Revenue has grown by 18.88% in the last year.
SPSC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.69% yearly.
EPS 1Y (TTM)23.98%
EPS 3Y22.92%
EPS 5Y24.27%
EPS growth Q2Q28.36%
Revenue 1Y (TTM)18.88%
Revenue growth 3Y19.76%
Revenue growth 5Y16.69%
Revenue growth Q2Q18.84%
3.2 Future
Based on estimates for the next years, SPSC will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.77% on average per year.
The Revenue is expected to grow by 14.72% on average over the next years. This is quite good.
EPS Next Y12.56%
EPS Next 2Y15.56%
EPS Next 3Y14.77%
EPS Next 5YN/A
Revenue Next Year15.68%
Revenue Next 2Y15.25%
Revenue Next 3Y14.72%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 64.29, SPSC can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of SPSC is on the same level as its industry peers.
When comparing the Price/Earnings ratio of SPSC to the average of the S&P500 Index (28.60), we can say SPSC is valued expensively.
Based on the Price/Forward Earnings ratio of 51.34, the valuation of SPSC can be described as expensive.
SPSC's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.15, SPSC is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.29 | ||
| Fwd PE | 51.34 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SPSC is valued a bit cheaper than the industry average as 64.49% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as SPSC.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.28 | ||
| EV/EBITDA | 62.2 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SPSC does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of SPSC may justify a higher PE ratio.
SPSC's earnings are expected to grow with 14.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)5.12
PEG (5Y)2.65
EPS Next 2Y15.56%
EPS Next 3Y14.77%
5. Dividend
5.1 Amount
SPSC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
SPS COMMERCE INC
NASDAQ:SPSC (5/17/2024, 7:00:03 PM)
After market: 196.09 0 (0%)196.09
+0.04 (+0.02%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap7.26B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.29 | ||
| Fwd PE | 51.34 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)5.12
PEG (5Y)2.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.16% | ||
| ROE | 10.03% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 13.54% | ||
| PM (TTM) | 12.22% | ||
| GM | 66% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.13 | ||
| Quick Ratio | 3.13 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)23.98%
EPS 3Y22.92%
EPS 5Y
EPS growth Q2Q
EPS Next Y12.56%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)18.88%
Revenue growth 3Y19.76%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
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EBIT growth 3Y
EBIT growth 5Y
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