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NEW YORK (TheStreet) -- SPS Commerce (SPSC) - Get Report has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C.  TheStreet Ratings Team has this to say about their recommendation:

"We rate SPS COMMERCE INC (SPSC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 26.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 5.95, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SPS COMMERCE INC is currently very high, coming in at 72.66%. Regardless of SPSC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SPSC's net profit margin of 2.41% is significantly lower than the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, SPS COMMERCE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, SPSC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • You can view the full analysis from the report here: SPSC Ratings Report