What Happened:
Shares of e-commerce software platform provider BigCommerce (NASDAQ: BIGC) fell 14.1% in the morning session after the company reported third quarter results that narrowly missed Wall Street's revenue estimates. We struggled to find many strong positives in these results. The company continued to burn cash, while the revenue outlook for the next quarter came in roughly in line with Wall Street's expectations. During the earnings call, management noted that they expect "macroeconomic conditions to remain a headwind in the e-commerce space." In addition, it announced a restructuring plan to reduce its current workforce by approximately 7 percent. Overall, this was a weaker quarter for BigCommerce.
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What is the market telling us:
BigCommerce's shares are very volatile and over the last year have had 41 moves greater than 5%. But moves this big are very rare even for BigCommerce and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 7.9% on the news that company reported second-quarter results that beat analysts' revenue and earnings per share expectations. The company maintained full year revenue guidance but increased operating profit guidance for that period, which was a welcome development. In addition, Daniel Lentz assumed the role of CFO, succeeding Robert Alvarez, who retired in July. BigCommerce also hired technology industry veteran and experienced e-commerce sales leader Steven Chung as its president and announced it will add new AI-powered features to its platform, leveraging Google Cloud's AI technologies. However, its below-Consensus revenue guidance for the next quarter was disappointing. Overall, this was a solid quarter for BigCommerce. The stock is up big, reflecting the quarter and likely also muted expectations going into the print.
BigCommerce is up 4.8% since the beginning of the year, but at $8.80 per share it is still trading 31.7% below its 52-week high of $12.88 from February 2023. Investors who bought $1,000 worth of BigCommerce's shares at the IPO in August 2020 would now be looking at an investment worth $121.63.
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