MINNEAPOLIS - SPS Commerce , Inc. (NASDAQ: NASDAQ:SPSC), renowned in the retail cloud services sector and currently valued at $6.77 billion, has completed the acquisition of Carbon6 Technologies, Inc., a software provider catering to Amazon (NASDAQ:AMZN) sellers with tools designed for revenue recovery for suppliers. The acquisition, announced today, aims to enhance the offerings for both first-party and third-party sellers in the retail space. According to InvestingPro data, SPS Commerce maintains a "GREAT" financial health score, positioning it well for strategic expansions.
Chad Collins, CEO of SPS Commerce, expressed enthusiasm about the merger, stating that the union of the two companies will bring forth unparalleled solutions for sellers on Amazon and position SPS Commerce as a prominent player in the revenue recovery market. The incorporation of Carbon6's employees and customers is expected to bolster SPS Commerce's existing services, building upon its impressive 19% revenue growth over the last twelve months.
SPS Commerce prides itself on being a pivotal retail network, facilitating the optimization of supply chain operations through its innovative cloud technology and expert services. With a customer base exceeding 45,000 recurring revenue clients across diverse sectors, including retail and logistics, SPS has consistently demonstrated growth, achieving an impressive 95 consecutive quarters of revenue expansion. The company operates with minimal debt, maintaining a healthy current ratio of 2.36. For detailed financial analysis and additional insights, InvestingPro subscribers have access to over 12 key financial tips and comprehensive valuation metrics.
While this acquisition signals a strategic expansion for SPS Commerce, the company's forward-looking statements caution that future results may vary due to a range of risks and uncertainties. These factors are detailed in the company's filings with the Securities and Exchange Commission. Notably, analysts maintain a positive outlook, with a consensus recommendation of 1.83 (where 1 is Strong Buy), though six analysts have recently revised their earnings expectations downward for the upcoming period.
This strategic move is expected to further enhance SPS Commerce's capabilities and offerings in the retail supply chain domain, providing comprehensive solutions to its customers. The company's dedication to customer service and expert solutions has established it as a leader in the retail network industry. This acquisition is based on a press release statement from SPS Commerce.
In other recent news, SPS Commerce has experienced significant developments, including acquisitions and analyst ratings. The company recently acquired Carbon6 Technologies for approximately $210 million, following its acquisition of SupplyPike for $206 million. Both companies operate in the domain of invoice deduction, and SPS Commerce plans to offer their products separately before potentially merging them into a unified solution.
Stifel analysts have adjusted their price target for SPS Commerce from $250 to $225, maintaining a Buy rating on the shares. They anticipate that the company will announce an expanded total addressable market by 2025, enhancing cross-selling opportunities. Loop Capital also holds a positive stance on SPS Commerce, reiterating a Buy rating with a price target of $230.00. Needham echoes this sentiment, maintaining a Buy rating and a $230.00 price target following the Carbon6 acquisition.
On the other hand, Piper Sandler initiated coverage on SPS Commerce with a Neutral rating and a price target of $198, noting a slowdown in the rate of new customer acquisitions for the company. These are recent developments that investors should take into account when considering SPS Commerce.
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