SPS Commerce Inc. (NASDAQ: SPSC) shares rose on Thursday December 29 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.
Meanwhile, U.S. stocks were little changed in early trade Thursday. The S&P 500 SPX, +0.04% rose 0.1% to 2,252, while the Dow DJIA, +0.04% advanced 16 points to 19,850. The Nasdaq Composite COMP, -0.04% was virtually flat at 5,439.
Shares of SPS Commerce Inc. (NASDAQ: SPSC) were downgraded by analysts at Zacks Investment Research in a note to their investors today. Zacks Investment Research currently has a rating of Hold on the shares. As a means of comparison, a number of other analysts have commented on the stock in recent days, and SPS Commerce Inc. has secured a consensus one-year price target of $80.56, higher than the opening price of $70.76. SPS Commerce Inc. stock has a 52-week high of $74.85. Downgrades happen when analysts believe that the future prospects for the security have dropped from the original recommendation, usually due to a material and fundamental change in the company’s procedures, future outlook or industry.
Shares of SPS Commerce Inc. (NASDAQ: SPSC) opened at $70.76 on Tuesday trading between $70.19 and $71.40, and last traded at $70.56, an increase of $0.04 or 0.05% from the previous closing price.
SPS Commerce Inc. (NASDAQ: SPSC) currently has a market cap of 1.20B.
SPS Commerce Inc. (NASDAQ: SPSC) Average Daily Trading Volume
The stock’s average daily volume is 112,259 shares out of a total float 16,913,000 and some 5,456 shares crossed the trading desk yesterday, lower than the norm. Momentum traders often use upticks in trading volume to pinpoint heavy volume accumulation or dissemination by institutional investors, so trading volume is likely to increase in the next few days.
While an increase in trading for short periods will not mean much, conversely, a trend of heavy trading volume on the buy side over a period of days or weeks delivers a positive cue to market traders that institutions may be moving in, so institutional sponsorship is crucial.
Institutional sponsorship simply refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.
Professional investors such as these retain teams of analysts that investigate thousands of stocks. Thus, watching their interests is a good way to ensure you are buying the right stocks.
SPS Commerce Inc. (NASDAQ: SPSC) Moving Averages
A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.
This is because the average acts like a floor (support), so the price bounces up off of it.
In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.
By identifying trends, moving averages allow traders to make those trends work in their favor and increase the number of winning trades.
With that in mind, SPS Commerce Inc. (NASDAQ: SPSC) now has a 50-day MA of $68.31 and 200-day MA of $65.99. It has traded in a 52-week range between $38.35 – 74.850 and today’s last price is 5.74%% lower than the 52 week high of $74.85.
Earnings growth is a critical factor to consider when investing in stocks and investors identify companies that have been successful at growing their earnings at least 25% or more over the past 3 years.
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