SPS Commerce (NASDAQ:SPSC) and Tyler Technologies (NYSE:TYL) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.
Institutional and Insider Ownership
96.8% of SPS Commerce shares are held by institutional investors. Comparatively, 92.9% of Tyler Technologies shares are held by institutional investors. 3.3% of SPS Commerce shares are held by company insiders. Comparatively, 4.4% of Tyler Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
SPS Commerce has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500. Comparatively, Tyler Technologies has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.
Valuation and Earnings
This table compares SPS Commerce and Tyler Technologies’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SPS Commerce||$279.12 million||5.51||$33.71 million||$0.99||44.60|
|Tyler Technologies||$1.09 billion||10.48||$146.53 million||$4.16||69.49|
Tyler Technologies has higher revenue and earnings than SPS Commerce. SPS Commerce is trading at a lower price-to-earnings ratio than Tyler Technologies, indicating that it is currently the more affordable of the two stocks.
This table compares SPS Commerce and Tyler Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and target prices for SPS Commerce and Tyler Technologies, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
SPS Commerce currently has a consensus target price of $65.28, suggesting a potential upside of 47.85%. Tyler Technologies has a consensus target price of $312.38, suggesting a potential upside of 8.06%. Given SPS Commerce’s stronger consensus rating and higher possible upside, equities analysts plainly believe SPS Commerce is more favorable than Tyler Technologies.
Tyler Technologies beats SPS Commerce on 10 of the 15 factors compared between the two stocks.
SPS Commerce Company Profile
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.
Tyler Technologies Company Profile
Tyler Technologies, Inc. provides integrated information management solutions and services for the public sector in the United States and internationally. The company operates in two segments, Enterprise Software, and Appraisal and Tax. It offers financial management solutions, including modular fund accounting systems for government agencies or not-for-profit entities; utility billing systems for the billing and collection of metered and non-metered services; products to automate city and county functions, such as municipal courts, parking tickets, equipment and project costing, animal and business licenses, permits and inspections, code enforcement, citizen complaint tracking, ambulance billing, fleet maintenance, and cemetery records management; and student information and transportation solutions for K-12 schools. The company also provides a suite of judicial solutions comprising court case management, court and law enforcement, prosecutor, and supervision systems to handle multi-jurisdictional county or statewide implementations, and single county systems; public safety software solutions; systems and software to automate the appraisal and assessment of real and personal property, as well as tax applications for agencies that bill and collect taxes; planning, regulatory, and maintenance software solutions for public sector agencies; software applications to enhance and automate land and other records and document management; and data and insights solutions. In addition, it offers software as a service arrangements and electronic document filing solutions for courts and law offices; software and hardware installation, data conversion, training, product modification, and maintenance and support services; and property appraisal outsourcing services for taxing jurisdictions. The company was founded in 1966 and is based in Plano, Texas.
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