SPSC
SPS Commerce, Inc.
$83.06
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 3.5% above fair value
You pay
$83.06
Bear
$57.78
Fair
$80.23
Bull
$103.27
Bear
$57.78
-30.4%
7% stage 1 growth, 11% discount
Fair
$80.23
-3.4%
12% stage 1 growth, 11% discount
Bull
$103.27
+24.3%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.7%
11.0%
3.0%
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
25.4x
Market is pricing in (growth)
12.2%
vs 11.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (23 analysts)
$69.00
Divergence from AlphaVal
16%
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $80.23 per share.
Warnings
Stock-based employee pay equals 58% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions