SPS Commerce (NASDAQ:SPSC) and Fastly (NYSE:FSLY) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.
Valuation and Earnings
This table compares SPS Commerce and Fastly’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SPS Commerce | $248.24 million | 8.08 | $23.87 million | $0.61 | 94.38 |
| Fastly | N/A | N/A | N/A | N/A | N/A |
SPS Commerce has higher revenue and earnings than Fastly.
Profitability
This table compares SPS Commerce and Fastly’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SPS Commerce | 11.67% | 9.80% | 7.97% |
| Fastly | N/A | N/A | N/A |
Analyst Ratings
This is a summary of recent ratings and price targets for SPS Commerce and Fastly, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SPS Commerce | 0 | 1 | 5 | 1 | 3.00 |
| Fastly | 0 | 2 | 10 | 0 | 2.83 |
SPS Commerce currently has a consensus price target of $61.64, indicating a potential upside of 7.07%. Fastly has a consensus price target of $25.49, indicating a potential upside of 13.63%. Given Fastly’s higher probable upside, analysts plainly believe Fastly is more favorable than SPS Commerce.
Institutional and Insider Ownership
97.0% of SPS Commerce shares are held by institutional investors. Comparatively, 13.1% of Fastly shares are held by institutional investors. 3.3% of SPS Commerce shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Summary
SPS Commerce beats Fastly on 8 of the 10 factors compared between the two stocks.
About SPS Commerce
SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It offers solutions through the SPS Commerce platform, a cloud-based platform that enhances the way retailers, suppliers, grocers, distributors, and logistics firms manage and fulfill orders, administer sell-through performance, and source new items. The company offers Trading Partner Community solution, which enables retailers, grocers, and distributors to introduce changes to their supply chain requirements to their trading partner community, and onboard new vendors to receive their first orders; Trading Partner Fulfillment solution that provides fulfillment automation and replaces or augments an organization’s existing staff and trading partner electronic communication infrastructure; and Trading Partner Assortment solution to manage individual attributes associated with each item a retailer or supplier sells. It also provides Trading Partner Analytics solution, which consists of data analytics applications that allow customers to enhance their visibility and analysis of their supply chains; Trading Partner Sourcing solutions that enables retailers to source providers of new items, suppliers to connect with new retailers, and retailing community; and Other Trading Partner Solutions, such as barcode labeling, planogram services, and scan and pack application that helps trading partners process information to streamline the picking and packaging process. The company sells its solutions through retailer, supplier, and logistic sales representatives to small- to mid-sized suppliers, as well as retailers, distributors, third-party logistics providers, and other trading partners. The company was formerly known as St. Paul Software, Inc. and changed its name to SPS Commerce, Inc. in May 2001. SPS Commerce, Inc. was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.
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