William Blair analyst Dylan Becker has maintained their neutral stance on SPSC stock, giving a Hold rating today.
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Dylan Becker has given his Hold rating due to a combination of factors that reflect SPS Commerce’s recent performance and future outlook. The company reported impressive fourth-quarter results, with both total and recurring revenue exceeding expectations by growing 18% and 19%, respectively. This growth was mainly driven by expansion momentum, as recurring revenue per customer increased by 15%, although the customer count saw only a marginal annual growth of 1%.
In addition, SPS Commerce doubled its total addressable market (TAM) since its IPO, now reaching over $11 billion. This indicates a substantial growth potential, supported by both market and platform expansion. However, despite a positive preliminary 2025 guidance and significant growth prospects in supply chain digitization, the stock’s current valuation seems to appropriately capture the business outlook. The shares are trading at multiples that reflect anticipated slowing organic growth, leading to the Hold rating as the current valuation appears to be balanced with the company’s growth trajectory.
Becker covers the Technology sector, focusing on stocks such as Powerfleet, ServiceTitan, Inc. Class A, and Guidewire. According to TipRanks, Becker has an average return of 15.0% and a 71.70% success rate on recommended stocks.
In another report released today, Robert W. Baird also maintained a Hold rating on the stock with a $175.00 price target.