The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how BigCommerce (NASDAQ:BIGC) and the rest of the e-commerce software stocks fared in Q1.
While e-commerce has been around for over two decades and enjoyed meaningful growth, its overall penetration of retail still remains low. Only around $1 in every $5 spent on retail purchases comes from digital orders, leaving over 80% of the retail market still ripe for online disruption. It is these large swathes of the retail where e-commerce has not yet taken hold that drives the demand for various e-commerce software solutions.
The 6 e-commerce software stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 1.5%. while next quarter's revenue guidance was in line with consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, but e-commerce software stocks have shown resilience, with share prices up 9.6% on average since the previous earnings results.
Best Q1: BigCommerce (NASDAQ:BIGC) Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce (NASDAQ:BIGC) provides software for businesses to easily create online stores.
BigCommerce reported revenues of $80.36 million, up 12% year on year, topping analysts' expectations by 4.1%. It was a solid quarter for the company, with an impressive beat of analysts' billings estimates and full-year revenue guidance topping analysts' expectations.
“Our first quarter results reflect a good start to the year as our total revenue exceeded $80 million, up 12% year-over-year. We also delivered strong profit improvement, with net income gaining nearly 23 points as a percent of revenue compared to last year,” said Brent Bellm, CEO of BigCommerce.
BigCommerce pulled off the biggest analyst estimates beat of the whole group. The stock is up 15.8% since the results and currently trades at $7.75.
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Squarespace (NYSE:NYSE:SQSP) Founded in New York City in 2003, Squarespace (NYSE:SQSP) is a platform for small businesses and creators to build their digital presences online.
Squarespace reported revenues of $281.1 million, up 18.6% year on year, outperforming analysts' expectations by 1.7%. It was a decent quarter for the company, with an impressive beat of analysts' billings estimates but a decline in its gross margin.
Squarespace delivered the highest full-year guidance raise among its peers. The stock is up 23.5% since the results and currently trades at $43.77.
Wix (NASDAQ:WIX) Founded in 2006 in Tel Aviv, Wix.com (NASDAQ:WIX) offers a free and easy to operate website building platform.
Wix reported revenues of $419.8 million, up 12.2% year on year, in line with analysts' expectations. It was a mixed quarter for the company, with a decent beat of analysts' billings estimates but a decline in its gross margin.
Wix had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is up 24.1% since the results and currently trades at $168.73.
Shopify (NYSE:TSX:SHOP) Originally created as an internal tool for a snowboarding company, Shopify (NYSE:SHOP) provides a software platform for building and operating e-commerce businesses.
Shopify reported revenues of $1.86 billion, up 23.4% year on year, in line with analysts' expectations. It was an ok quarter for the company, with a significant improvement in its gross margin but a miss of analysts' billings estimates.
Shopify achieved the fastest revenue growth among its peers. The stock is down 14.8% since the results and currently trades at $65.7.
VeriSign (NASDAQ:VRSN) While the company is not a domain registrar and does not directly sell domain names to end users, Verisign (NASDAQ:VRSN) operates and maintains the infrastructure to support domain names such as .com and .net.
VeriSign reported revenues of $384.3 million, up 5.5% year on year, in line with analysts' expectations. It was a good quarter for the company: VeriSign beat analysts' revenue and EPS estimates.
VeriSign had the slowest revenue growth among its peers. The stock is down 2.4% since the results and currently trades at $178.28.
