Investors in SPS Commerce, Inc. (NASDAQ:SPSC) had a good week, as its shares rose 3.3% to close at US$209 following the release of its second-quarter results. The result was positive overall - although revenues of US$154m were in line with what the analysts predicted, SPS Commerce surprised by delivering a statutory profit of US$0.48 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for SPS Commerce

Taking into account the latest results, the most recent consensus for SPS Commerce from ten analysts is for revenues of US$625.7m in 2024. If met, it would imply a satisfactory 7.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 4.8% to US$2.03. In the lead-up to this report, the analysts had been modelling revenues of US$623.8m and earnings per share (EPS) of US$1.94 in 2024. So the consensus seems to have become somewhat more optimistic on SPS Commerce's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.1% to US$223. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic SPS Commerce analyst has a price target of US$240 per share, while the most pessimistic values it at US$186. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of SPS Commerce'shistorical trends, as the 15% annualised revenue growth to the end of 2024 is roughly in line with the 16% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. So although SPS Commerce is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SPS Commerce's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SPS Commerce going out to 2026, and you can see them free on our platform here..

We also provide an overview of the SPS Commerce Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com