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 not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, SPSC could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
SPSC had positive earnings in the past year.
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
The Return On Assets of SPSC (7.33%) is better than 79.79% of its industry peers.
The Return On Equity of SPSC (8.82%) is better than 76.60% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.03%, SPSC belongs to the top of the industry, outperforming 81.91% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SPSC is below the industry average of 12.26%.
| 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.
Looking at the Operating Margin, with a value of 14.85%, SPSC belongs to the top of the industry, outperforming 82.98% of the companies in the same industry.
In the last couple of years the Operating Margin of SPSC has remained more or less at the same level.
The Gross Margin of SPSC (67.73%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of SPSC has remained more or less at the same level.
| 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
SPSC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, SPSC has more shares outstanding
Compared to 5 years ago, SPSC has more shares outstanding
SPSC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 18.58 indicates that SPSC is not in any danger for bankruptcy at the moment.
SPSC has a Altman-Z score of 18.58. This is amongst the best in the industry. SPSC outperforms 92.55% of its industry peers.
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 | 18.58 |
ROIC/WACC0.9
WACC8.93%
2.3 Liquidity
A Current Ratio of 1.64 indicates that SPSC should not have too much problems paying 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.
The Quick ratio of SPSC (1.64) is comparable to the rest of the industry.
| 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.
The Earnings Per Share has been growing by 22.07% on average over the past years. This is a very strong growth
SPSC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.46%.
SPSC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.97% yearly.
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
Based on estimates for the next years, SPSC will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.21% on average per year.
Based on estimates for the next years, SPSC will show a quite strong growth in Revenue. The Revenue will grow by 15.54% on average per year.
EPS Next Y15.84%
EPS Next 2Y15.6%
EPS Next 3Y17.21%
EPS Next 5YN/A
Revenue Next Year19.55%
Revenue Next 2Y16.11%
Revenue Next 3Y15.54%
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
The Price/Earnings ratio is 39.16, which means the current valuation is very expensive for SPSC.
Based on the Price/Earnings ratio, SPSC is valued a bit cheaper than the industry average as 65.96% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of SPSC to the average of the S&P500 Index (27.45), we can say SPSC is valued slightly more expensively.
The Price/Forward Earnings ratio is 30.49, which means the current valuation is very expensive for SPSC.
Based on the Price/Forward Earnings ratio, SPSC is valued a bit cheaper than the industry average as 63.83% of the companies are valued more expensively.
SPSC is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.16 | ||
| Fwd PE | 30.49 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SPSC is valued a bit cheaper than 72.34% of the companies in the same industry.
SPSC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SPSC is cheaper than 69.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.17 | ||
| EV/EBITDA | 36.08 |
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 17.21% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.47
PEG (5Y)1.77
EPS Next 2Y15.6%
EPS Next 3Y17.21%
5. Dividend
5.1 Amount
SPSC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
141.36
+1.42 (+1.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners100.55%
Inst Owner Change-1.79%
Ins Owners0.64%
Ins Owner Change120.34%
Market Cap5.37B
Analysts80
Price Target182.84 (29.34%)
Short Float %3.55%
Short Ratio4.18
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)-2.98%
PT rev (3m)-10.44%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.78%
EPS NY rev (1m)0%
EPS NY rev (3m)2.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.06%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.16 | ||
| Fwd PE | 30.49 | ||
| P/S | 8.02 | ||
| P/FCF | 38.17 | ||
| P/OCF | 32.87 | ||
| P/B | 5.83 | ||
| P/tB | 39.86 | ||
| EV/EBITDA | 36.08 |
EPS(TTM)3.61
EY2.55%
EPS(NY)4.64
Fwd EY3.28%
FCF(TTM)3.7
FCFY2.62%
OCF(TTM)4.3
OCFY3.04%
SpS17.63
BVpS24.25
TBVpS3.55
PEG (NY)2.47
PEG (5Y)1.77
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 | 18.58 |
F-Score6
WACC8.93%
ROIC/WACC0.9
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 Y15.84%
EPS Next 2Y15.6%
EPS Next 3Y17.21%
EPS Next 5YN/A
Revenue 1Y (TTM)19.46%
Revenue growth 3Y18.29%
Revenue growth 5Y17.97%
Sales Q2Q%21.38%
Revenue Next Year19.55%
Revenue Next 2Y16.11%
Revenue Next 3Y15.54%
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%