What SPS Commerce’s latest quarter and guidance mean for investors

SPS Commerce (SPSC) recently reported first quarter 2026 results, issued earnings guidance for the second quarter and full year, and updated investors on progress under its current share repurchase program.

For the March quarter, SPS Commerce reported sales of US$192.12 million compared with US$181.55 million a year earlier. Net income was US$19.73 million versus US$22.2 million, with basic and diluted EPS from continuing operations at US$0.53 compared with US$0.58.

Alongside the results, the company guided second quarter 2026 revenue to a range of US$194.5 million to US$196.5 million, with net income per diluted share of US$0.53 to US$0.56, based on an expected 37.3 million fully diluted weighted average shares outstanding.

For full year 2026, SPS Commerce anticipates revenue of US$796 million to US$802 million and net income per diluted share of US$2.66 to US$2.69, again using 37.3 million fully diluted weighted average shares, giving investors a clearer view of expected scale for the year.

Between 1 January and 31 March 2026, the company repurchased 757,721 shares for US$48.64 million, equal to 2.02% of shares. In total, it has now bought back 929,053 shares, or 2.47%, for US$63.64 million under the program announced on 30 October 2025.

The latest guidance and buyback update come after a sharp reset in the stock, with a 90 day share price return of a 29.3% decline and a 1 year total shareholder return of a 59.09% decline, even though the past month has seen modest positive momentum.

If SPS Commerce’s recent move has you rethinking where growth and resilience might come from next, it could be worth widening your search with 19 top founder-led companies

With the stock down sharply over the past year and trading at a discount to both analyst targets and some intrinsic estimates, you have to ask: Is SPSC now undervalued, or is the market already pricing in its future growth?

Most Popular Narrative: 28.9% Undervalued

At a last close of $58.40 against a narrative fair value of $82.09, SPS Commerce is framed as materially undervalued, with that gap tied directly to specific long term growth and profitability assumptions.

The accelerating digitalization of retail supply chains and rising compliance requirements are driving robust demand for SPS Commerce's cloud-based EDI and supply chain solutions, supporting sustained growth in new customer adds and recurring revenue.

As the complexity of omni-channel retail and need for real-time, integrated supply chain analytics increases, SPS Commerce is well positioned to expand its average revenue per user (ARPU) through expanded network connections and the cross-selling of high-value products like analytics and revenue recovery solutions.

Read the complete narrative. Read the complete narrative.

Want to see what kind of growth path needs to sit behind that fair value gap? The narrative leans on a specific earnings ramp, firmer margins, and a future P/E multiple that assumes SPS Commerce keeps compounding its position in cloud based supply chain software without stretching assumptions into blue sky territory.

Result: Fair Value of $82.09 (UNDERVALUED)

However, that fair value gap can close quickly if U.S. supplier spending stays cautious or if competition and pricing pressure hit the recurring revenue story harder than expected.

Next Steps

If this mix of caution and opportunity has you on the fence, it makes sense to move quickly, review the key positives, and weigh them against your own expectations, starting with 4 key rewards.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.