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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Sps Commerce, Inc. (XNAS:SPSC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SPSC
Name:
SPS COMMERCE, INC. (XNAS:SPSC)
Sector:
- 8.00K
Industry:
Software�Infrastructure
CEO:
Mr. Archie Black
Total Employees:
1,901
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 11.37% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SPS COMMERCE, INC.(SPSC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
117.28
One Month Price Target:
$117.78
Six Month Price Target :
$120.31
Likely Price in One Year's Time:
Ticker:
$123.34
Likely Trading Range Today Under (Normal Volatility)
$116.93
Price Upper limit ($) :
$117.97
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$111.16
This week:
$103.59
This month :
$89.9
Other Primary facts
Market Cap:
4.26B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
36.02M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.24%
-17.%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$145.65
$132.37
$88.91
$102.19
Medium risk (<10%) entry points
Buy Call
Sell Call
$128.05
Buy Put:
Sell Put:
$125.22
$106.47
$109.34
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SPSC
Sharpe Ratio:
5.16%
Comparison:
SPSC, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 215.63% higher than the industry
& ratio is 126.40% higher than the market/S&P 500 average
Average Returns/Yield of
SPSC
Daily returns:
0.14%
Weekly returns:
0.72%
Monthly returns:
2.87%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is 139.67% above industry average
Classification:
SPSC, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.48
Statistical test of Returns:
SPSC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.61%
Weekly Volatility:
5.84%
Monthly Volatility:
11.68%
Yearly Volatility:
40.46%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.26%
Volatility in last five trading days has been -51.68% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.22%
Weekly VaR:
-11.67%
Monthly VaR:
-23.35%
How Much Can the price of
SPSC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-80.88%
This translates to price declining to:
$95.00
This translates to price declining to:
$22.43
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SPSC is a 64.78% riskier investment compared to the market/S&P 500 & is 41.17% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -21.61% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SPSC
Beta in relation to market/S&P 500--0.77
Expected beta in 1 year's time:
0.623
Expected beta in 3 year's time:
0.882
Unlevered (debt free) Beta:
0.75
Beta in relation to Nasdaq (XNAS):
0.575
Beta in relation to all global stocks::
0.654
Beta Comparison & Analysis
Beta of competitors/peers::
1.487
Beta is -48.29% lower than peers
Average Industry Beta:
1.112
Beta is -30.86% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
10.14%
Sustainable growth rate is -97.26% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.261
Alpha is 620.25% above industry average alpha yield
Alpha is 1659% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SPSC
Equity cost of capital:
0.084
Equity cost of capital is -21.83% below industry mean WACC
Unlevered (without debt) cost of capital:
8.21%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$11.12
Revenue growth rate per share of (3Y):
8.59
Annual revenue growth rate is -33.58% below industry average
EPS:
$1.27
Expected Annual growth rate of EPS (3Y):
8.02%
Expected future EPS growth rate is -73.38% lower than the Software�Infrastructure industry
Free cash flow (FCF) per share:
$2.10
-
-
Debt per share
$0.43
EBITDA per share
$2.30
Valuation Analysis Today of
SPSC
P/E Ratio:
91.25
P/E Ratio of Competitors/Peers:
54.5
P/E ratio is 67.43% higher than main peers & is 39.87% higher than the industry
Stock price/value with industry average P/E ratio: $82.85
SPSC is 41.56% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
10.55
Price to sales ratio is -3.94% below the industry mean
P/B (Price to book value ratio):
8.59
Price to free cash flow: 55.75
Price to free cash flow ratio is -1.75% lower than the industry
Net income growth rate (3Y):
78.67%
Net income growth rate is -99.07% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
3.12%
Net debt to equity ratio:
-37.32%
Debt to assets ratio:
2.50%
Net debt to assets ratio:
-29.91%
Debt-to-asset ratio is -96.41% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
-8.62%
Annual debt growth is -108% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.408
Statistical significance of correlation:
SPSC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is -14.94% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
-0.047
Covariance of price movement with the market:
-0.071
Kurtosis
6.241
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.711
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
SPSC
Gross Profit Margin Ratio:
263%
Operating Profit Margin Ratio:
14.72%
Operating profit margin is -224.02% lower than the industry
Net Profit Margin Ratio:
263%
Effective Tax Rate:
19.16%
Effective tax rate is -38.85% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.56%
Return on equity (ROE) is -91.04% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.66%
Return on assets (ROA) is -302.37% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
3.72
Current ratio is 59.89% above industry average
Cash Conversion Cycle (days):
13.7
Cash conversion cycle is -87.85% below industry average
The remaining useful life of property plant & equipment is: 3.6 years
Stock based compensation to net income ratio:
19.18%
In-depth Efficiency Analysis
Revenue generated per employee:
210.6K
Each employee generates -47% less revenue than industry average revenue per employee
EBITDA generated per employee:
43.6K
Each employee generates -33% less EBITDA than industry average revenue per employee
Profit generated per employee:
24.7K
Each employee generates 18% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.0K
Each employee generates -100% less free cash flow than industry average revenue per employee
Assets/Capital per employee
137.7K
Each employee generates -100% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 25.83%
Growth rate in R&D investment/expenditure is -1096.18% lower than the industry
Competitors/Peer firms of
SPSC
INSIGHT ENTERPRISES, INC. (XNAS:NSIT)
BIGCOMMERCE HOLDINGS, INC. (XNAS:BIGC)
LIVEPERSON, INC. (XNAS:LPSN)
STAMPER OIL & GAS CORP. (XTSX:STMP)
VIASAT, INC. (XNAS:VSAT)
MANTECH INTERNATIONAL CORPORATION (XNAS:MANT)
Cerence Inc. (XNAS:CRNC)
VNET Group, Inc. (XNAS:VNET)
AMBARELLA INC (XNAS:AMBA)
Current Analyst Ratings
Strong buy�8%
Buy�17%
Hold�17%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
400.38M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
137.10M
263.28M
41.03M
62.04M
153.38M
91.34M
9.93M
204.35M
-
-
24.82M
82.96M
58.93M
47.00M
58.14M
11.14M
47.00M
Statement of Cash Flow
Date:
Period:
6.33M
Differed Income Tax :
- 269.00K
Stock Based Compensation :
9.02M
Change in Working Capital :
- 24473.00K
Accounts Receivables:
- 5563.00K
Other Working Capital:
- 7199.00K
Other Non-Cash Items:
1.14M
Net Cash Provided by Operating Activities:
4.35M
Investments in PP&E:
- 4355.00K
Net Acquisitions:
-
Purchases of Investments:
- 54977.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
203.09M
39.97M
243.06M
38.78M
-
69.63M
351.47M
42.51M
144.16M
56.16M
-
199.00K
18.81M
261.84M
-
613.31M
4.73M
4.34M
-
56.80M
28.56M
94.43M
15.34M
-
27.36M
-
121.79M
38.00K
150.69M
- 709.0K
341.50M
March 31, 2022 at 6:00:00 AM
341.44M
491.52M
613.31M
-
19.68M
- 183413.0K
65.00M
-
5.67M
-
-
- 15226.00K
-
651.00K
- 14575.00K
96.00K
- 4464.00K
203.09M
207.55M
4.35M
- 4355.00K
- 8.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SPSC
2023
2024
2025
2026
2027
$127.07
$133.64
$140.54
$147.80
$155.43