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Q1 Earnings Review: E-commerce Software Stocks Led by BigCommerce (NASDAQ:BIGC)


Max Juang /
2024/06/13 2:53 am EDT

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 Total Revenue

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.

Is now the time to buy BigCommerce? Access our full analysis of the earnings results here, it's free.

Squarespace (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 Total Revenue

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.

Is now the time to buy Squarespace? Access our full analysis of the earnings results here, it's free.

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.

Read our full analysis of Wix's results here.

Shopify (NYSE: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.

Read our full, actionable report on Shopify here, it's free.

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.

Read our full, actionable report on VeriSign here, it's free.

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