SPS Commerce (SPSC) Stock Forecast & Price Target

SPS Commerce Inc has demonstrated robust financial performance, with total revenue increasing by 16.0% year-over-year and organic recurring revenue growth reported at 10.5%, highlighting its strong market demand and capacity for sustainable growth. The company achieved an impressive gross margin of 71.2%, reflecting a 190 basis points improvement year-over-year, which bodes well for profitability and operational efficiency. Additionally, projections for adjusted EBITDA indicate growth to a range of $246.3-$266.7 million, representing an increase of 11.2%, further solidifying the positive outlook for SPS Commerce's financial trajectory.

SPS Commerce has adjusted its financial outlook negatively, guiding down its Adjusted EBITDA to $229.7-$231.7 million, which reflects only a slight improvement in margin compared to prior guidance. The company faced significant challenges, particularly in its Carbon6 revenue recovery business, which fell 30% short of expectations and contributed to a $3 million shortfall in total revenue, resulting in overall revenues for FY25 being lowered to $751.6-$753.6 million, representing a decrease in projected growth from 19.3% to 18.0%. Additionally, a weaker-than-expected performance in the 3Q25 and delays in enablement campaigns due to economic uncertainty have led to a 26% decline in shares, further underscoring the negative outlook on the stock.