Procore Technologies (NYSE:PCOR) vs. SPS Commerce (NASDAQ:SPSC) Financial Analysis

SPS Commerce (NASDAQ:SPSC) and Procore Technologies (NYSE:PCOR) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Valuation and Earnings

This table compares SPS Commerce and Procore Technologies”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SPS Commerce	$780.24 million	3.71	$93.34 million	$2.25	36.26
Procore Technologies	$1.49 billion	7.84	-$100.78 million	($0.23)	-333.26

SPS Commerce has higher earnings, but lower revenue than Procore Technologies. Procore Technologies is trading at a lower price-to-earnings ratio than SPS Commerce, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

99.0% of SPS Commerce shares are owned by institutional investors. Comparatively, 81.1% of Procore Technologies shares are owned by institutional investors. 0.6% of SPS Commerce shares are owned by company insiders. Comparatively, 16.8% of Procore Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for SPS Commerce and Procore Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SPS Commerce	1	7	2	0	2.10
Procore Technologies	1	2	18	0	2.81

SPS Commerce currently has a consensus price target of $79.33, indicating a potential downside of 2.75%. Procore Technologies has a consensus price target of $80.35, indicating a potential upside of 4.83%. Given Procore Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Procore Technologies is more favorable than SPS Commerce.

Profitability

This table compares SPS Commerce and Procore Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SPS Commerce	10.65%	13.72%	11.38%
Procore Technologies	-2.31%	2.59%	1.47%

Risk & Volatility

SPS Commerce has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Procore Technologies has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

About SPS Commerce

SPS Commerce, Inc. provides cloud-based supply chain management solutions in the United States and internationally. It offers solutions through the SPS Commerce, a cloud-based platform that enhances the way retailers, grocers, suppliers, distributors, and logistics firms manage and fulfill omnichannel orders, optimize sell-through performance, and automate new trading relationships. The company also provides Fulfillment, an electronic data interchange solution that scales as a business grows, where companies use a single system to manage orders and logistics from various sales channels, including wholesale, eCommerce, and marketplaces; and Analytics product that enables organizations to enhance visibility into how products are selling through a single connection across various sales channels, including wholesale, eCommerce, and marketplaces, as well as enhances access and usage of sales and inventory data through a combination of analytics applications, network of connections, and industry-leading expertise. In addition, it offers various complimentary products, such as assortment product, which simplifies the communication of robust, accurate item data by automatically translating item attributes, and hierarchies; and community product that allows organizations to accelerate digitization of their supply chain and improve collaboration with suppliers through change management and onboarding programs. 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.

About Procore Technologies

Procore Technologies, Inc. engages in the provision of a cloud-based construction management platform and related software products in the United States and internationally. The company’s platform enables owners, general and specialty contractors, architects, and engineers to collaborate on construction projects. It offers Preconstruction that facilitates collaboration between internal and external stakeholders during the planning, budgeting, estimating, bidding, and partner selection phase of a construction project; and Project Execution, which enables real-time collaboration, information storage, design, BIM model clash detection, and regulation compliance for teams on the jobsite and in the back office. The company also provides Workforce Management, that helps contractors to schedule, track, and forecast labor productivity, enhance time management, communication with workforces, and manage profitability on construction projects; Financial Management, which provides customers with visibility into the financial health of their individual construction projects and portfolios, as well as facilitates untethered access to financial data, linking the field, and the office in real-time; and Construction Intelligence, that allows customers to capture, manage, and learn from data for project and portfolio reporting, analytics, and artificial intelligence-guided workflows, as well as to monitor projects and drive informed decision-making for business needs. It serves owners, general contractors, and specialty contractors operating in the commercial, residential, industrial, and infrastructure segments of the construction industry. The company allow users to access its products on computers, smartphones, and tablets through any web browser or from its mobile application available for iOS and Android platforms through its direct sales team. Procore Technologies, Inc. was incorporated in 2002 and is headquartered in Carpinteria, California.