SPS COMMERCE INC (SPSC) Stock Fundamental Analysis
NASDAQ:SPSC - Nasdaq - US78463M1071 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to SPSC. SPSC was compared to 282 industry peers in the Software industry. SPSC has an excellent financial health rating, but there are some minor concerns on its profitability. SPSC is growing strongly while it is still valued neutral. This is a good combination! These ratings would make SPSC suitable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year SPSC was profitable.
SPSC had a positive operating cash flow in the past year.
Each year in the past 5 years SPSC has been profitable.
Each year in the past 5 years SPSC had a positive operating cash flow.
1.2 Ratios
SPSC's Return On Assets of 7.33% is fine compared to the rest of the industry. SPSC outperforms 79.79% of its industry peers.
SPSC has a Return On Equity of 8.82%. This is in the better half of the industry: SPSC outperforms 76.60% of its industry peers.
SPSC has a better Return On Invested Capital (8.03%) than 81.56% of its industry peers.
SPSC had an Average Return On Invested Capital over the past 3 years of 8.71%. This is below the industry average of 12.17%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.33% | ||
| ROE | 8.82% | ||
| ROIC | 8.03% |
ROA(3y)7.88%
ROA(5y)7.91%
ROE(3y)9.71%
ROE(5y)9.84%
ROIC(3y)8.71%
ROIC(5y)8.62%
1.3 Margins
SPSC's Profit Margin of 12.13% is fine compared to the rest of the industry. SPSC outperforms 78.01% of its industry peers.
SPSC's Profit Margin has been stable in the last couple of years.
SPSC has a Operating Margin of 14.85%. This is amongst the best in the industry. SPSC outperforms 82.98% of its industry peers.
SPSC's Operating Margin has been stable in the last couple of years.
SPSC has a Gross Margin (67.73%) which is in line with its industry peers.
SPSC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.85% | ||
| PM (TTM) | 12.13% | ||
| GM | 67.73% |
OM growth 3Y-0.86%
OM growth 5Y0.26%
PM growth 3Y1.44%
PM growth 5Y0.01%
GM growth 3Y0.57%
GM growth 5Y0%
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.
The number of shares outstanding for SPSC has been increased compared to 5 years ago.
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 18.12. This indicates that SPSC is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 18.12, SPSC belongs to the best of the industry, outperforming 92.20% of the companies in the same industry.
SPSC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 18.12 |
ROIC/WACC0.73
WACC11.01%
2.3 Liquidity
SPSC has a Current Ratio of 1.64. This is a normal value and indicates that SPSC is financially healthy and should not expect problems in meeting its short term obligations.
SPSC has a Current ratio (1.64) which is in line with its industry peers.
A Quick Ratio of 1.64 indicates that SPSC should not have too much problems paying its short term obligations.
SPSC has a Quick ratio (1.64) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.36% over the past year.
Measured over the past years, SPSC shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.07% on average per year.
SPSC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.46%.
Measured over the past years, SPSC shows a quite strong growth in Revenue. The Revenue has been growing by 17.97% on average per year.
EPS 1Y (TTM)18.36%
EPS 3Y23.77%
EPS 5Y22.07%
EPS Q2Q%16.28%
Revenue 1Y (TTM)19.46%
Revenue growth 3Y18.29%
Revenue growth 5Y17.97%
Sales Q2Q%21.38%
3.2 Future
The Earnings Per Share is expected to grow by 16.42% on average over the next years. This is quite good.
The Revenue is expected to grow by 15.42% on average over the next years. This is quite good.
EPS Next Y15.68%
EPS Next 2Y15.42%
EPS Next 3Y16.42%
EPS Next 5YN/A
Revenue Next Year19.58%
Revenue Next 2Y16.13%
Revenue Next 3Y15.42%
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
SPSC is valuated quite expensively with a Price/Earnings ratio of 38.85.
Based on the Price/Earnings ratio, SPSC is valued a bit cheaper than the industry average as 66.31% of the companies are valued more expensively.
SPSC is valuated rather expensively when we compare the Price/Earnings ratio to 27.53, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 30.34, which means the current valuation is very expensive for SPSC.
64.89% of the companies in the same industry are more expensive than SPSC, based on the Price/Forward Earnings ratio.
SPSC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 36.71.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.85 | ||
| Fwd PE | 30.34 |
4.2 Price Multiples
SPSC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SPSC is cheaper than 72.34% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, SPSC is valued a bit cheaper than the industry average as 69.50% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.87 | ||
| EV/EBITDA | 35.09 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SPSC has a very decent profitability rating, which may justify a higher PE ratio.
SPSC's earnings are expected to grow with 16.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.48
PEG (5Y)1.76
EPS Next 2Y15.42%
EPS Next 3Y16.42%
5. Dividend
5.1 Amount
No dividends for SPSC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
140.26
+2.69 (+1.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners100.55%
Inst Owner Change-0.23%
Ins Owners0.64%
Ins Owner Change120.38%
Market Cap5.33B
Analysts80
Price Target181.95 (29.72%)
Short Float %3.77%
Short Ratio4.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.3%
Min EPS beat(2)0.86%
Max EPS beat(2)15.73%
EPS beat(4)4
Avg EPS beat(4)6.95%
Min EPS beat(4)0.86%
Max EPS beat(4)15.73%
EPS beat(8)8
Avg EPS beat(8)8.12%
EPS beat(12)12
Avg EPS beat(12)9.72%
EPS beat(16)16
Avg EPS beat(16)10.28%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-1.01%
Max Revenue beat(2)-0.58%
Revenue beat(4)1
Avg Revenue beat(4)-0.59%
Min Revenue beat(4)-1.01%
Max Revenue beat(4)0.11%
Revenue beat(8)2
Avg Revenue beat(8)-0.58%
Revenue beat(12)2
Avg Revenue beat(12)-0.78%
Revenue beat(16)4
Avg Revenue beat(16)-0.65%
PT rev (1m)-0.49%
PT rev (3m)-10.87%
EPS NQ rev (1m)-0.2%
EPS NQ rev (3m)-3.24%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)1.96%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)0.08%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.85 | ||
| Fwd PE | 30.34 | ||
| P/S | 7.95 | ||
| P/FCF | 37.87 | ||
| P/OCF | 32.62 | ||
| P/B | 5.78 | ||
| P/tB | 39.55 | ||
| EV/EBITDA | 35.09 |
EPS(TTM)3.61
EY2.57%
EPS(NY)4.62
Fwd EY3.3%
FCF(TTM)3.7
FCFY2.64%
OCF(TTM)4.3
OCFY3.07%
SpS17.63
BVpS24.25
TBVpS3.55
PEG (NY)2.48
PEG (5Y)1.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.33% | ||
| ROE | 8.82% | ||
| ROCE | 10.41% | ||
| ROIC | 8.03% | ||
| ROICexc | 8.92% | ||
| ROICexgc | 103.05% | ||
| OM | 14.85% | ||
| PM (TTM) | 12.13% | ||
| GM | 67.73% | ||
| FCFM | 21% |
ROA(3y)7.88%
ROA(5y)7.91%
ROE(3y)9.71%
ROE(5y)9.84%
ROIC(3y)8.71%
ROIC(5y)8.62%
ROICexc(3y)13.58%
ROICexc(5y)14.47%
ROICexgc(3y)98.15%
ROICexgc(5y)87.03%
ROCE(3y)11.28%
ROCE(5y)11.17%
ROICexcg growth 3Y10.82%
ROICexcg growth 5Y19.47%
ROICexc growth 3Y-13.8%
ROICexc growth 5Y-9.82%
OM growth 3Y-0.86%
OM growth 5Y0.26%
PM growth 3Y1.44%
PM growth 5Y0.01%
GM growth 3Y0.57%
GM growth 5Y0%
F-Score6
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 48.48% | ||
| Cap/Sales | 3.38% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 111.72% | ||
| Profit Quality | 173.12% | ||
| Current Ratio | 1.64 | ||
| Quick Ratio | 1.64 | ||
| Altman-Z | 18.12 |
F-Score6
WACC11.01%
ROIC/WACC0.73
Cap/Depr(3y)58.3%
Cap/Depr(5y)68.47%
Cap/Sales(3y)3.75%
Cap/Sales(5y)4.32%
Profit Quality(3y)164.93%
Profit Quality(5y)172.42%
High Growth Momentum
Growth
EPS 1Y (TTM)18.36%
EPS 3Y23.77%
EPS 5Y22.07%
EPS Q2Q%16.28%
EPS Next Y15.68%
EPS Next 2Y15.42%
EPS Next 3Y16.42%
EPS Next 5YN/A
Revenue 1Y (TTM)19.46%
Revenue growth 3Y18.29%
Revenue growth 5Y17.97%
Sales Q2Q%21.38%
Revenue Next Year19.58%
Revenue Next 2Y16.13%
Revenue Next 3Y15.42%
Revenue Next 5YN/A
EBIT growth 1Y31.03%
EBIT growth 3Y17.28%
EBIT growth 5Y18.28%
EBIT Next Year41.2%
EBIT Next 3Y24.51%
EBIT Next 5YN/A
FCF growth 1Y45.6%
FCF growth 3Y13.76%
FCF growth 5Y18.74%
OCF growth 1Y39.11%
OCF growth 3Y11.71%
OCF growth 5Y17%