SPSC - SPS Commerce: Continued Dealmaking Adds To The Growth Path
2025-01-04 08:41:16 ET
Summary
- SPS Commerce continues strong growth with organic and M&A efforts, but high valuations and elevated multiples make it unattractive for investment despite solid track record.
- Recent acquisitions, including SupplyPike and Carbon6 Technologies, boost revenues but come with lower margins.
- Despite improved earnings projections, realistic earnings remain around $2 per share, making current valuation of 90 times earnings too high.
- Continued M&A activity and net cash balances support growth, but cautious stance remains due to demanding valuations and modest earnings improvements.
In May, I concluded that SPS Commerce ( SPSC ) was continuing its growth trajectory. The company continued to deliver on solid organic growth, combined with M&A efforts....
SPS Commerce: Continued Dealmaking Adds To The Growth Path