Is SPS COMMERCE INC (NASDAQ:SPSC) suited for quality investing?

In this article we will dive into SPS COMMERCE INC (NASDAQ:SPSC) as a possible candidate for quality investing. Investors should always do their own research, but we noticed SPS COMMERCE INC showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Why NASDAQ:SPSC may be interesting for quality investors.

• Over the past 5 years, SPS COMMERCE INC has experienced impressive revenue growth, with 16.69% increase. This demonstrates the company's ability to effectively expand its top line and suggests a positive outlook for future revenue generation.
• With a notable ROIC excluding cash and goodwill at 81.32%, SPS COMMERCE INC demonstrates its commitment to generating sustainable returns for shareholders. This metric emphasizes the company's effective use of capital and its ability to deliver long-term value.
• With a favorable Debt/Free Cash Flow Ratio of 0.0, SPS COMMERCE INC showcases its sound financial discipline and cash flow management. This ratio indicates the company's ability to service its debt obligations while maintaining sufficient free cash flow for future investments or operational needs.
• SPS COMMERCE INC demonstrates consistent Profit Quality over the past 5 years, with a strong 171.0%. This indicates the company's ability to generate sustainable and reliable profits, showcasing its long-term profitability and financial stability.
• SPS COMMERCE INC has experienced impressive EBIT growth over the past 5 years, with 23.67% increase. This reflects the company's effective operational performance and highlights its potential for long-term financial success.
• SPS COMMERCE INC has achieved superior EBIT 5-year growth compared to its Revenue 5-year growth. This demonstrates the company's ability to maximize its profitability through effective cost management and operational strategies.

What else is there to say on the fundamentals of NASDAQ:SPSC?

ChartMill employs a sophisticated system to assign a Fundamental Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple fundamental indicators and properties.

Overall SPSC gets a fundamental rating of 7 out of 10. We evaluated SPSC against 284 industry peers in the Software industry. SPSC gets an excellent profitability rating and is at the same time showing great financial health properties. SPSC is valued quite expensive, but it does show an excellent growth. These ratings could make SPSC a good candidate for growth and quality investing.

For an up to date full fundamental analysis you can check the fundamental report of SPSC

More quality stocks can be found in our Caviar Cruise screen.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.