Craig-Hallum on Friday reduced its rating on SPS Commerce from Buy to Hold and lowered the firm’s price objective to $70. The research note came as the shares trade near $65.67, a level well below the stock’s 52-week high of $154.76 and reflecting a 56.4% decline over the past year.
The downgrade follows recent financial disclosures and forward guidance from the company. Craig-Hallum pointed to a quarterly revenue result that sat at the low end of the company’s guidance range and to a 2026 outlook that fell slightly short of Wall Street expectations as material drivers of the change in stance.
In its commentary, the research firm highlighted concerns about SPS Commerce’s acquisitions in 2024 and 2025 of revenue recovery companies, saying those moves "do not appear to have panned out thus far." The firm identified those transactions as contributors to a weaker outlook than analysts had anticipated.
Craig-Hallum also noted that enablement campaigns the company originally expected to run in early 2026 have been delayed into later in the year, creating what the analyst described as "considerable uncertainty" about the causes of this "very unusual behavior." The research note added that worries around artificial intelligence and its potential negative impact on the company could outweigh the "broad range of positives laid out by management."
Separately, SPS Commerce reported fourth-quarter 2025 results showing an earnings per share (EPS) of $1.14, ahead of the $1.01 consensus estimate and representing a 12.87% EPS surprise. Revenue for the quarter totaled $192.7 million, marginally below the anticipated $193.6 million. While the EPS outperformance was notable, the revenue shortfall contributed to a cautious market reception.
Taken together, the downgrade, the trimmed price target and the mixed quarterly metrics underscore investor focus on execution of recent strategic moves and clarity on timing for planned customer enablement efforts. The analyst note suggests that until those execution questions are resolved, skepticism among some sell-side researchers may persist.
Implications
The move by Craig-Hallum reframes the near-term narrative around SPS Commerce from growth acceleration to execution risk, reinforcing market attention on upcoming operational milestones and guidance updates.