SPSC Should I Buy
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SPS Commerce Inc (SPSC) is not a strong buy at the moment for a beginner investor with a long-term horizon. While the company has shown consistent revenue growth and strong financial performance in the latest quarter, the stock is currently facing bearish technical indicators, cautious analyst sentiment, and macroeconomic headwinds. Given the lack of immediate positive trading signals and the investor's preference for long-term stability, holding off on buying is recommended until there is more clarity on the company's turnaround and better technical entry points.
The stock is in a bearish trend with MACD below zero (-2.536), RSI indicating oversold conditions (3.547), and bearish moving averages (SMA_200 > SMA_20 > SMA_5). Key support is at $59.313, and resistance is at $69.795. The stock is currently trading near its support level, but the overall trend remains weak.
Achieved 100 consecutive quarters of revenue growth.
Strong financial performance in Q4 2025 with revenue up 12.72% YoY and net income up 47.17% YoY.
Launch of AI capabilities ('MAX') to enhance supply chain network.
Share repurchase program with $200 million authorization remaining.
Analysts have downgraded the stock and lowered price targets due to underwhelming FY26 guidance and macroeconomic headwinds.
Concerns over acquired business performance and customer spending delays.
CFO retirement adds uncertainty.
Bearish technical indicators and weak trading sentiment.
In Q4 2025, revenue increased by 12.72% YoY to $192.65 million, net income rose by 47.17% YoY to $25.84 million, and EPS grew by 47.83% YoY to $0.68. Gross margin improved to 65.46%, up 4.10% YoY. The company continues to demonstrate strong financial growth despite macroeconomic challenges.
Analysts have downgraded the stock to Hold or Neutral ratings, with price targets ranging from $65 to $95. Concerns include slower Enablement campaign traction, customer spending delays, and macroeconomic headwinds. While the company has a strong history of revenue growth, analysts remain cautious about its near-term performance and fundamentals.
