MINNEAPOLIS—Chadwick Collins, Chief Executive Officer of SPS Commerce Inc. (NASDAQ:SPSC), recently sold a significant portion of his holdings in the company. According to a filing with the Securities and Exchange Commission, Collins sold a total of 6,839 shares of common stock on November 5, 2024, generating approximately $1.16 million.
The sales were executed in multiple transactions at varying prices. Collins sold 900 shares at an average price of $166.51, 703 shares at $167.57, 1,000 shares at $169.25, 1,841 shares at $170.19, and 2,395 shares at $171.31. Following these transactions, Collins retains direct ownership of 54,446 shares of SPS Commerce.
These transactions were conducted under a pre-established 10b5-1 trading plan, which allows corporate insiders to set up a predetermined schedule for selling company stock.
In other recent news, SPS Commerce has shown robust growth in its Q3 2024 financial results, reporting a 21% year-over-year increase in revenue to $163.7 million. Adjusted EBITDA also grew by 19% to $48.4 million. The company's strong performance was buoyed by strategic acquisitions, including SupplyPike and Traverse Systems, which have exceeded expectations. Financial services firm Baird has raised its price target for SPS Commerce from $186 to $188, maintaining a neutral rating on the stock. This adjustment was made following the company's Q3 performance, which saw a 21% increase in revenue and a 19% rise in EBITDA. Looking ahead, SPS Commerce projects its Q4 2024 revenue to be between $168.5 million and $169.5 million, with full-year revenue expected to grow by 18% to 19%. These recent developments underline SPS Commerce's ability to leverage opportunities within its existing customer base and its ongoing efforts to enhance its market position through strategic acquisitions.
InvestingPro Insights
To provide additional context to Chadwick Collins' recent stock sale, let's examine some key financial metrics and insights from InvestingPro for SPS Commerce Inc. (NASDAQ:SPSC).
As of the latest data, SPS Commerce boasts a market capitalization of $6.98 billion, reflecting its significant presence in the software industry. The company's revenue for the last twelve months as of Q3 2024 stood at $611.82 million, with an impressive revenue growth of 19.04% over the same period. This strong top-line performance underscores the company's ability to expand its customer base and services.
InvestingPro Tips highlight that SPS Commerce has been profitable over the last twelve months, with analysts predicting continued profitability for the current year. This financial health is further supported by the company's liquid assets exceeding short-term obligations, indicating a solid balance sheet position.
However, investors should note that SPSC is trading at a high P/E ratio of 87.38, which suggests a premium valuation compared to its earnings. This high multiple is consistent with another InvestingPro Tip indicating that the company is trading at a high earnings multiple relative to its near-term earnings growth potential.
It's worth mentioning that InvestingPro offers 14 additional tips for SPSC, providing a more comprehensive analysis for investors seeking deeper insights into the company's financial position and market performance.
The recent stock sale by CEO Collins, while significant, should be viewed in the context of these financial metrics and the company's overall performance. As SPS Commerce continues to demonstrate strong revenue growth and maintain profitability, investors may want to closely monitor how the company leverages its market position for future growth opportunities.
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