NEW YORK (
-- SPS Commerce
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the ratings report include:
- SPSC's revenue growth has slightly outpaced the industry average of 23.4%. Since the same quarter one year prior, revenues rose by 33.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SPSC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.48, which clearly demonstrates the ability to cover short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, SPS COMMERCE INC's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for SPS COMMERCE INC is currently very high, coming in at 77.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 82.90% significantly outperformed against the industry average.
SPS Commerce, Inc. provides on-demand supply chain management solutions worldwide. It offers integration, collaboration, connectivity, visibility, and data analytics over the Internet using a software-as-a-service model. SPS Commerce, Inc. The company has a P/E ratio of 23.1, above the average diversified services industry P/E ratio of 22.5 and above the S&P 500 P/E ratio of 17.7. SPS has a market cap of $295.4 million and is part of the
industry. Shares are down 3.7% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff