SPS Commerce (SPSC) saw an unusual purchase of 535 April $220 calls for $400K back on 11-25, a position down ~20% but after the dip on Friday still sets up well. SPSC has already inflected out of the downtrend and needs a close over $198 to break out of a long-term value zone. SPSC is a long-time favorite.

SPS Commerce is a leading provider of cloud-based supply chain management services across our global retail network. Its products make it easier for retailers, grocers, distributors, suppliers, and logistics firms to communicate and collaborate by simplifying how they manage and share item, inventory, order and sales data across omnichannel retail channels. Its products enable customers to increase supply chain performance, optimize inventory levels and sell-through, reduce operational costs, improve order visibility, and satisfy consumer demands for a seamless omnichannel experience. The retail industry has undergone many changes in recent years, which have accelerated the need for a more automated supply chain. To navigate disruptions and meet growing consumer demands, companies across the retail ecosystem need to integrate their operations and communications from wholesale, eCommerce, and marketplace sales channels into a single omnichannel process.

SPSC has a $7B market cap and trades 49X Earnings, 33.5X EBITDA, 53.5X FCF and 9.8X EV/Sales with revenues seen rising 16.3% in 2025 with 13.3% EPS growth, a quality growth name. SPSC sees significant opportunities ahead, both in its core fulfillment and analytics offerings as well as through strategic acquisitions and geographic expansion, while maintaining a focus on margin expansion through operational efficiencies. SPS has benefited significantly from network effects, as the size and scale of its network of retailers and suppliers creates a competitive advantage and leads to ongoing growth opportunities.

SPSC is a name I have always thought would make an ideal acquisition target which could be the link of thinking with these April $220 calls.