Strategic Move: Marty M Reaume Acquires SPS Commerce Stock Options Worth $135K

A substantial insider move unfolded on May 21, as Reaume, Board Member at SPS Commerce SPSC, reported the acquisition of stock options for 1,136 shares in an SEC filing.

What Happened: In a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, Reaume, Board Member at SPS Commerce, acquired stock options for 1,136 shares of SPSC. These options provide Reaume with the right to purchase the company's stock at $80.31 per share.

During Tuesday's morning session, SPS Commerce shares down by 0.0%, currently priced at $199.42. Considering the current price, Reaume's 1,136 shares have a total value of $135,308.

About SPS Commerce

SPS Commerce Inc is a provider of cloud-based supply chain management services for retailers, grocers, distributors, suppliers, and logistics firms to increase supply chain performance, optimize inventory levels and sell-through, reduce operational costs, improve order visibility, and satisfy consumer demands for a seamless omnichannel experience. Its solutions are delivered through the SPS Commerce platform and provide integrations and retail performance analytics to its customers. Its products are; Fulfillment, Analytics, and Other products like Assortment and Community also it provides one-time services such as professional services and testing and certification. The group derives revenue from recurring monthly fees and set-up fees.

SPS Commerce's Economic Impact: An Analysis

Revenue Growth: SPS Commerce displayed positive results in 3 months. As of 31 March, 2024, the company achieved a solid revenue growth rate of approximately 18.84%. This indicates a notable increase in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Information Technology sector.

Navigating Financial Profits:

• Gross Margin: With a high gross margin of 65.58%, the company demonstrates effective cost control and strong profitability relative to its peers.

• Earnings per Share (EPS): SPS Commerce's EPS is below the industry average. The company faced challenges with a current EPS of 0.49. This suggests a potential decline in earnings.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.02.

Exploring Valuation Metrics Landscape:

• Price to Earnings (P/E) Ratio: The P/E ratio of 108.97 is lower than the industry average, implying a discounted valuation for SPS Commerce's stock.

• Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 13.38, SPS Commerce's stock is perceived as being overvalued in the market, particularly in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): SPS Commerce's EV/EBITDA ratio of 63.9 exceeds industry averages, indicating a premium valuation in the market

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

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Navigating the Impact of Insider Transactions on Investments

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Transaction Codes To Focus On

When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of SPS Commerce's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.