Is SPS Commerce, Inc. overvalued or undervalued?

As of 4 August 2025, the valuation grade for SPS Commerce, Inc. has moved from fair to expensive, indicating a shift towards overvaluation. The company appears overvalued based on its metrics, including a P/E ratio of 70, a Price to Book Value of 6.14, and an EV to EBITDA ratio of 38.05. In comparison, peers such as CCC Intelligent Solutions Holdings, Inc. have a significantly lower P/E of 222.22 and a more favorable EV to EBITDA of 34.67, highlighting the relative overvaluation of SPS Commerce.
The stock has underperformed against the S&P 500, with a year-to-date return of -40.95% compared to the S&P 500's 12.22%, and over the past three years, it has returned -11.72% while the benchmark gained 70.41%. This performance further supports the conclusion that SPS Commerce is overvalued in its current market position.