SPS Commerce (SPSC) Stock Forecast & Price Target

SPS Commerce Inc. has demonstrated strong financial performance, with total revenue increasing by 16.0% year-over-year and organic recurring revenue growing by 10.5%. The company achieved an impressive gross margin of 71.2%, reflecting a year-over-year increase of 190 basis points, and anticipates adjusted EBITDA margins to expand by 2 percentage points, reaching approximately 32.7%. Additionally, the normalization of customer additions suggests that SPS Commerce is trending towards pre-pandemic annual customer growth levels, enhancing its long-term growth prospects.

SPS Commerce Inc. has revised its Adjusted EBITDA guidance down to $229.7-$231.7 million, indicating a slight margin improvement but reflecting overall cautious sentiment following lower revenue expectations. The company's FY25 revenue guidance was also reduced to $751.6-$753.6 million, representing a slowdown in growth from previous forecasts, primarily due to underperformance in its Carbon6 revenue recovery business and adverse seasonality trends. As a result, shares have declined approximately 26% due to disappointing third-quarter results, a reduced growth outlook for 2026, and ongoing macroeconomic challenges impacting revenue generation.