Should You Hold SPS Commerce (SPSC)?

Conestoga Capital Advisors, an asset management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their momentum that began in early April, reaching new all-time highs in the third quarter. In the quarter, the Conestoga Small Cap Composite returned -1.4% net-of-fees, underperforming the Russell 2000 Growth Index’s impressive 12.2% gain. Most of the Index’s gains come from low-quality stock leadership, where unprofitable, high-beta names have considerably outperformed. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its third-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as SPS Commerce, Inc. (NASDAQ:SPSC). Headquartered in Minneapolis, Minnesota, SPS Commerce, Inc. (NASDAQ:SPSC) offers cloud-based supply chain management solutions. The one-month return of SPS Commerce, Inc. (NASDAQ:SPSC) was 1.74%, and its shares lost 43.44% of their value over the last 52 weeks. On October 17, 2025, SPS Commerce, Inc. (NASDAQ:SPSC) stock closed at $109.05 per share, with a market capitalization of $4.134 billion.

Conestoga Capital Advisors stated the following regarding SPS Commerce, Inc. (NASDAQ:SPSC) in its third quarter 2025 investor letter:

“SPS Commerce, Inc. (NASDAQ:SPSC) provides cloud EDI and supply-chain connectivity for retailers and brands. While second quarter results exceeded expectations, management issued medium term guidance of “at least” high-single digit revenue growth and margin expansion annually. The growth rate caught some investors off-guard, while the margin expansion was positive. Management has since hosted an investor day that better highlighted the durability of growth and a larger addressable market, but investors are awaiting execution and comfort with the pace of revenue growth.”

Is SPS Commerce Inc. (SPSC) The Best 52-Week Low Stock To Buy Now According to Short Sellers?

SPS Commerce, Inc. (NASDAQ:SPSC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 34 hedge fund portfolios held SPS Commerce, Inc. (NASDAQ:SPSC) at the end of the second quarter, up from 31 in the previous quarter.  SPS Commerce, Inc.’s (NASDAQ:SPSC) revenue grew 22% in the second quarter of 2025 to $187.4 million. While we acknowledge the risk and potential of SPS Commerce, Inc. (NASDAQ:SPSC) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SPS Commerce, Inc. (NASDAQ:SPSC) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered SPS Commerce, Inc. (NASDAQ:SPSC) and shared the list of best beaten down technology stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.