Analyzing Appian (NASDAQ:APPN) & SPS Commerce (NASDAQ:SPSC)

SPS Commerce (NASDAQ:SPSC) and Appian (NASDAQ:APPN) are both mid-cap business services companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Profitability

This table compares SPS Commerce and Appian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SPS Commerce	12.31%	12.41%	10.06%
Appian	-18.80%	-532.05%	-14.59%

Volatility & Risk

SPS Commerce has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Appian has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for SPS Commerce and Appian, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SPS Commerce	0	4	6	0	2.60
Appian	1	4	1	0	2.00

SPS Commerce currently has a consensus price target of $220.25, indicating a potential upside of 18.37%. Appian has a consensus price target of $39.20, indicating a potential upside of 30.36%. Given Appian’s higher possible upside, analysts clearly believe Appian is more favorable than SPS Commerce.

Insider and Institutional Ownership

99.0% of SPS Commerce shares are owned by institutional investors. Comparatively, 52.7% of Appian shares are owned by institutional investors. 1.0% of SPS Commerce shares are owned by company insiders. Comparatively, 44.0% of Appian shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares SPS Commerce and Appian’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SPS Commerce	$536.91 million	12.86	$65.82 million	$1.83	101.68
Appian	$545.36 million	3.99	-$111.44 million	($1.47)	-20.46

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

Summary

SPS Commerce beats Appian on 10 of the 14 factors compared between the two stocks.

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 Appian

Appian Corporation, a software company that provides low-code design platform in the United States, Mexico, Portugal, and internationally. The company's platform offers artificial intelligence, process automation, data fabric, and process mining. It provides The Appian Platform, an integrated automation platform that enables organizations to design, automate, and optimize mission-critical business processes. The company also offers professional and customer support services. It serves to financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation industries. Appian Corporation was incorporated in 1999 and is headquartered in McLean, Virginia.